Flex Power generation, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (this “Agreement”) is entered into as of
April 25, 2013 (the “Effective Date”) by and between Flex Power Generation,
Inc., a Delaware corporation (the “Company”), and Alain J. Castro (“Executive”).

 

AGREEMENT

 

In consideration of the premises and mutual covenants herein and for other good
and valuable consideration, the parties agree as follows:

 

1.            Duties and Scope of Employment.

 

(a)          Title and Duties. As of the Effective Date, Executive will be
employed serve as the Company’s Chief Executive Officer (“CEO”) reporting to the
board of directors (the “Board”) of the Company, and a member of the Board.
During the Employment Term (as defined in Section 2 below), Executive will have
authority and render such business and professional services in the performance
of Executive’s duties as are customarily associated with Executive’s position
within the Company and Executive agrees to perform such other duties and
functions as may from time to time be reasonably assigned or delegated to
Executive by the Company’s Board. Notwithstanding the foregoing, the Executive
shall have three (3) weeks transition period to familiarize himself with
corporate and business matters relevant to the discharge of his duties. The
Executive shall become CEO and Board Member at the end of the transition period,
which shall become effective on May 13, 2013. During such transition period, the
predecessor CEO will continue to hold the title and associated with it duties,
including the seat on the Board.

 

(b)          Obligations. During the Employment Term, and excluding any periods
of vacation and sick leave to which the Executive is entitled, Executive will
perform Executive’s duties faithfully and to the best of Executive’s ability and
will devote such time as reasonably necessary to fulfill Executive’s
responsibilities in the position. It will be at the Executive’s discretion to
determine the time that is reasonable to fulfill this obligations. Executive and
the Company agree that the Company represents Executive’s principal business
focus. Executive agrees to travel as reasonably necessary to fulfill Executive’s
responsibilities in the position. During the Employment Term, Executive agrees
that Executive shall maintain loyalty to the Company, shall take no action that
would be injurious to the Company interests, and shall comply with all rules,
regulations and policies of the Company. During the Employment Term, it shall
not be a violation of this Agreement for Executive to (i) serve on a corporate,
civic or charitable boards or committees, (ii) deliver lectures, fulfill
speaking engagements or teach at educational institutions, pr (iii) manage
personal investments and business endeavors, including by not limited to
advisory services, so long as such activities do not significantly interfere
with the performance of the Executive’s responsibilities as an employee of the
Company in accordance with this Agreement.

 

 

 

 

(c)          Executive’s Employability. Executive represents and warrants that:
(i) Executive has the right to execute, deliver and perform Executive’s duties
under this Agreement, and (ii) Executive is not a party to any other agreements,
arrangements or obligations (e.g. confidentiality agreements, noncompetition
agreements), whether written, oral or implied, which include terms that would
limit Executive’s ability to execute, deliver and perform Executive’s duties
under this Agreement or which are otherwise inconsistent with this Agreement.
This warranty will remain in full force and effect throughout the Employment
Term (as defined in Section 2 below).

 

2.            Employment Term. The “Employment Term” under this Agreement will
commence on the Effective Date and will continue, unless sooner terminated as
provided by this Agreement, for one (1) year thereafter (the “Initial Term”);
provided, however, that the Initial Term will automatically be extended for
successive one (1) year terms, unless either party gives the other party written
notice no less than 30 days prior to the end of the Initial Term or any
extension thereof stating that this Agreement will terminate at the expiration
of the Initial Term or any extension thereof. Notwithstanding anything in this
Agreement to the contrary, this Agreement and Executive’s employment will
terminate automatically at the conclusion of an unrenewed Initial Term or
extension thereof and, in such event, the Company will have no obligation or
liability to Executive thereafter except for the obligations of the Company
specifically set forth in Sections 7, 8 and 15(a).

 

3.            Compensation.

 

(a)          Base Salary. During the Employment Term, the Company will pay
Executive as compensation for Executive’s services a base salary at rate of
$16,666.67 per month for a total base salary of $200,000 per year (which salary
may be increased but not decreased by the Board in its sole discretion) (the
“Base Salary”). The Base Salary will be paid in regular installments in
accordance with the Company’s normal payroll practices, subject to applicable
deductions and withholdings. The first and last payment will be adjusted, if
necessary, to reflect a commencement or termination date other than the first or
last working day of a pay period.

 

(b)          Annual Bonus. Executive shall be eligible for an annual bonus
and/or other annual incentive compensation (collectively the “Annual Bonus”)
during the Employment Term, in accordance with any applicable executive bonus
plan applicable to Executive as may be adopted by the Board in its sole
discretion. Any such Annual Bonus earned by Executive shall be paid no later
than March 15 of the year following the year during which the Annual Bonus is
earned, unless Executive shall elect to defer the receipt of such Annual Bonus
pursuant to a Company-sponsored deferred compensation plan then in effect to the
extent the Company’s bonus and deferred compensation plans allow for such a
deferral.

 

(c)          Equity Incentive/Option Plan Eligibility. Executive shall be
eligible to participate in the Company’s equity incentive plan or incentive
option plan, as applicable, with grants and vesting schedules as determined by
the Board from time to time. Any such grant shall be conditioned upon
Executive’s execution of such documentation (such as, but not limited to, a
grant notice) as the Board deems reasonably necessary in connection with such
grant.

 

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4.            Employee Benefits. During the Employment Term, Executive will be
considered a full-time employee and be entitled to participate in the employee
benefit plans and programs currently and hereafter maintained by the Company of
general applicability to other Employees of Executive’s classification at the
Company (the “Benefits”). The Company reserves the right to cancel or change the
Benefit plans and programs it offers to its employees at any time.

 

5.            Vacation. Executive shall be entitled to a minimum of three weeks
paid vacation per year, in accordance with the Company’s standard vacation
policy, with the timing and duration of specific vacations mutually and
reasonably agreed to by Executive and the Company.

 

6.            Business Expenses. During the Employment Term, the Company will
reimburse Executive for reasonable, customary and documented business, travel
and related expenses, incurred by Executive in the furtherance of or in
connection with the performance of Executive’s duties hereunder, in accordance
with the Company’s expense reimbursement policy as in effect from time to time
(the “Expense Reimbursement”). Reimbursement of expenses under this Section 4(c)
shall be made within 30 days following submission of a completed expense
reimbursement form and Executive shall submit such completed expense
reimbursement form no later than six (6) months after such expense was incurred
by Executive.

 

7.            Termination; Severance.

 

(a)          Termination by the Company for Cause. The Company may terminate
Executive’s employment for “Cause” (defined below). If the Company terminates
Executive’s employment or gives written notice of a non-renewal of this
Agreement for Cause, then this Agreement shall terminate without further
obligations to Executive, other than for payment of the sum of: (i) Executive’s
Base Salary and bonuses, if any, through the date of termination to the extent
not therefore paid; (ii) any earned but unused vacation and PTO time; and (iii)
and Expense Reimbursement, to the extent not theretofore paid (the sum of the
amounts described in clauses (i), (ii) and (iii) shall be hereinafter referred
to as “Accrued Obligations”).

 

(b)          Termination by the Company other than for Cause, Death or
Disability.

 

(i)          In General. Except as otherwise provided in Section 7(b)(ii) below,
if the Company terminates Executive’s employment or gives written notice of a
non-renewal of this Agreement without Cause, then Executive will be entitled to
receive (i) Accrued Obligations, and (ii) monthly cash severance payments at the
Base Salary rate, less standard withholdings and deductions, paid during the
six(6) month period immediately following the termination date of Executive’s
employment; provided, however, that Executive’s right to receive any the
payments set forth in clause (ii) above will be conditioned upon Executive and
Executive’s spouse, if Executive has one at the time, executing, and not
revoking, a general release of claims and affirmation of Executive’s other
continuing obligations under this Agreement in a form acceptable to and provided
by the Company (including without limitation unconditional release,
representations that no claims have been filed, confidentiality,
nondisparagement, transition, no admission, etc.). All such payments will cease
as of the earlier of the date on which Executive obtains new employment or the
date on which Executive engages (or assist any other person or entity to engage)
in any activity competitive with the business of the Company. If Executive
obtains new full-time employement during the severance period or engages in a
competitive activitiy, Executive is responsible for notifying the Company
immediately.

 

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(ii)         During Change of Control Period. If, during the six (6)-month
period immediately preceding or following a Change of Control, the Company
terminates Executive’s employment or gives written notice of a non-renewal of
this Agreement without Cause, then Executive will be entitled to receive (i)
Accrued Obligations, (ii) monthly cash severance payments at the Base Salary
rate, less standard withholdings and deductions, paid during the six (6) month
period immediately following the termination date of Executive’s employment, and
(iii) immediate vesting of all unvested outstanding options issued in the
Executive’s name; provided, however, that Executive’s right to receive any the
payments set forth in clause (ii) above will be conditioned upon Executive and
Executive’s spouse, if Executive has one at the time, executing, and not
revoking, a general release of claims and affirmation of Executive’s other
continuing obligations under this Agreement in a form acceptable to and provided
by the Company (including without limitation unconditional release,
representations that no claims have been filed, confidentiality,
nondisparagement, transition, no admission, etc.). All such payments will cease
as of the earlier of the date on which Executive obtains new employment or the
date on which Executive engages (or assist any other person or entity to engage)
in any activity competitive with the business of the Company. If Executive
obtains new full-time employement during the severance period or engages in a
competitive activitiy, Executive is responsible for notifying the Company
immediately.

 

(c)          Termination by Executive Generally. Executive may terminate this
Agreement at any time by written notice of resignation (a “Resignation Notice”)
to the Board; provided that:

 

(i)          Executive’s resignation will not become effective until the earlier
of (A) 90 days after the date the Resignation Notice is given to the Board, or
(B) the date on which the Company specifies that such resignation will become
effective; and

 

(ii)          For a period of 30 days following the effective date of
Executive’s resignation, Executive shall make himself or herself available to
the Company and/or its agents (A) for the purpose of facilitating an efficient
transition of Executive’s job related responsibilities and duties to other
designated individuals, and (B) to respond to questions from the Company and/or
its agents regarding information and/or activities in which Executive was
engaged while employed by the Company. The parties acknowledge and agree that
(I) this Section 7(c)(ii) is premised on Executive’s reasonable efforts to
cooperate, and the Company’s reasonable use of Executive’s time, and (II)
Executive will not be compensated for Executive’s time under this Section
7(c)(ii).

 

(d)          Definitions.

 

(i)          Cause. For purposes of this Agreement, “Cause” means (A)
Executive’s willful dishonesty or fraud with respect to the business affairs of
the Company; (B) Executive’s willful falsification of any employment or Company
records; (C) Executive’s misappropriation of or intentional damage to the
business or property of the Company, including the improper use or disclosure of
the confidential or proprietary information of the Company (excluding damage of
little or no consequence to the business or property of the Company); (D)
Executive’s conviction (including any plea of guilty or nolo contendere) of a
felony or crime that involves moral turpitude; (E) Executive’s willful and
continued failure to comply with reasonable written directives of the company
after Executive’s receipt of written notice by the Company of the refusal and a
reasonable opportunity to cure (as described below); or (F) the misappropriation
of any corporate opportunity, or otherwise obtaining personal profit from any
transaction which is adverse to the interests of the Company or to the benefits
of which the Company is entitled. The Company must give Executive written notice
of its intention to terminate Executive for Cause, which notice must (I) state
the grounds on which the proposed termination for Cause is based, and (II) be
given no later than 90 days after the later of occurrence of the event giving
rise to these grounds or the discovery thereof by the Board. Executive must have
30 days after receiving this notice to cure these grounds (if cure is possible).
If Executive fails to cure these grounds within 30 days, “Cause” will exist for
the Company’s termination of Executive’s employment. For purposes of this
definition, no act, or failure to act, by Executive will be considered “willful”
if done, or omitted to be done, by Executive in good faith and in the reasonable
belief that the act or omission was in the best interest of the Company or
required by applicable law.

 

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(ii)         Change of Control. For purposes of this Agreement, a “Change of
Control” occurs when:

 

(1)         Any “person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended from time to time (“Exchange
Act”)), becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the total voting power represented by the Company’s then
outstanding voting securities (“Voting Power”), unless such “person” was the
“beneficial owner” of at least 20% of the Voting Power as of February 1, 2012
and does not become the “beneficial owner” of 80% or more of the Voting Power;
or

 

(2)         The Company consummates the sale, exchange, lease or other
disposition of all or substantially all of its assets to a person or group of
related persons, as such terms are defined or described in Sections 3(a)(9) and
13(d)(3) of the Exchange Act; or

 

(3)         The Company consummates a merger, excluding the currently
comtemplated reverse merger, reorganization, recapitalization, consolidation, or
similar transaction with any other corporation or other business entity, in one
transaction or a series of related transactions (except one in which (A) the
holders of the Company’s voting securities outstanding immediately before such
merger or consolidation continue to hold at least 50% of the voting power in the
surviving entity, or (B) a transaction in which a single party (or a group of
affiliated parties) acquires voting securities of the Company and the holders of
voting securities of the Company immediately before the transaction do not
dispose of a majority of their interests in the Company in connection with that
transaction); or

 

(4)         The Company dissolves or liquidates.

 

For purposes of this Section 7(e)(ii), “Company” includes Company’s affiliates
and successors.

 

(e)          Limited Rights to Severance Payments. For clarity, Executive shall
only be entitled to any severance payments of any kind pursuant to this
Agreement if (i) the Company terminates Executive’s employment or gives written
notice of a non-renewal of this Agreement without Cause. No Severance Payment
obligations shall arise out of (i) a termination or nonrenewal of this Agreement
by the Company with Cause, (ii) a termination of this Agreement by the
Executive, or (iii) a termination of this Agreement pursuant to Section 8 below.

 

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8.          Death or Disability. The Employment Term and Executive’s employment
will terminate upon Executive’s death or Disability. Upon termination of
Executive’s employment for either death or Disability, Executive or Executive’s
estate, as the case may be, will be entitled to receive any Accrued Obligations.
In addition, and upon such a determination by the Board in its sole discretion,
Executive or Executive’s estate, as the case may be, may be granted (i)
additional vesting of then-unvested stock or stock options, as applicable, (ii)
a proportional amount of any earned and unpaid Annual Bonus based on Executive’s
performance through the date of termination, and/or (iii) severance payments;
provided, however, that any such determination by the Board, in its sole
discretion, will be conditioned upon Executive (or Executive’s estate) and
Executive’s spouse (if Executive has one at the time), executing, and not
revoking, a general release of claims and affirmation of Executive’s other
continuing obligations under this Agreement in a form acceptable to and provided
by the Company (including without limitation unconditional release,
representations that no claims have been filed, confidentiality,
nondisparagement, transition, no admission, etc.). Upon termination of
Executive’s employment due to death or Disability pursuant to this Section,
Executive or Executive’s estate, as the case may be, will have no further rights
to any compensation or any other benefits under this Agreement. All other
benefits, if any, due Executive following Executive’s termination for death or
Disability will be determined in accordance with the Company’s plans and
practices. For purposes of this Agreement, “Disability” means Executive’s
inability to perform one or more of the essential functions of Executive’s job
due to Executive’s physical or mental impairment, with or without reasonable
accommodation as required by law, for any period aggregating more than 120 days
in any 365 consecutive day period. If the Company determines that Executive has
become Disabled, the Company shall notify Executive of its determination.
Executive may then request an accommodation from the Company to assist in
his/her return to work. The Company will determine whether Executive’s request
can be accommodated without undue hardship no later than 30 days after Executive
requests an accommodation. In the event Executive’s request cannot be
accommodated, the Company may, by notice given in the manner provided in this
Agreement, terminate the status of Executive as an executive and employee of the
Company. Any such termination shall become effective 30 days after such notice
of termination is given, unless within such 30 day period, Executive becomes
capable of rendering services of the character contemplated hereby (and a
physician chosen by the Company so certifies in writing) and Executive in fact
resumes such services.

 

9.            Confidential Information.

 

(a)          Executive covenants that Executive will not use for Executive’s
benefit, or disclose, communicate or divulge to, or use for the direct or
indirect benefit of any Person other than the Company, any confidential,
proprietary or unique information (“Confidential Information”) belonging to,
used by or in possession of the Company including, but not limited to, the
methods, policies, procedures, techniques, trade secrets, software, products,
customer lists or other knowledge or processes used or developed by the Company
or other information concerning the Company of which Executive became aware as a
result of Executive’s employment with the Company. If Executive is uncertain
about whether certain information or material is Confidential Information, then
Executive shall treat that information or material as Confidential Information.
The foregoing restrictions will not apply to (i) information which is or
becomes, other than as a result of a breach of this Agreement or a similar
confidentiality obligation generally available to the public, or (ii) the
disclosure of information required pursuant to a subpoena or other legal
process; provided that Executive will notify the Company, in writing, of the
receipt of any such subpoena or other legal process requiring such disclosure
immediately after receipt thereof and the Company will have a reasonable
opportunity to quash such subpoena or other legal process prior to any
disclosure by Executive. For purposes of this Agreement the word “Person” means
and includes any: (i) natural person; (ii) firm; (iii) partnership; (iv) joint
venture; (v) corporation; (vi) limited liability company; (vii) limited
liability partnership; (viii) business venture; (ix) trust; (x) association;
(xi) consumer organization; (xii) state, local or federal government agency,
branch, department or other governmental unit; (xiii) bankruptcy or other
trustee; or (xiv) any other Person.

 

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(b)          During the Employment Term and after the expiration thereof,
regardless of the reason, Executive shall not use the Confidential Information
for the benefit of Executive or any other Person other than the Company. During
the Employment Term, Executive shall keep the Confidential Information in the
strictest confidence and share it with other Persons only for the benefit of the
Company. Moreover, from and after the expiration of the Employment Term,
regardless of reason, Executive will not disclose any Confidential Information
to any Persons other than the Company, in whole or in part, in any matter either
directly or indirectly.

 

(c)          From and after the expiration or termination of Executive’s
employment with the Company, regardless of the reason, Executive shall not make
copies of any Confidential Information in any form or manner whatsoever
(including, but not limited to, computer printouts, computer tapes, discs,
etc.). Moreover, immediately upon and after the expiration or termination of
Executive’s employment with the Company, regardless of the reason, Executive
shall surrender, transfer possession of, and deliver (collectively, “Transfer”)
to the Company all originals and all copies, in whatever form (whether written,
contained on computer media or otherwise) of: (i) all Confidential Information;
and (ii) all property, notes, manuals, reports, documents and other things that
relate in any way, directly or indirectly, to any Confidential Information
(subparts (i) and (ii) are referred to collectively as “Information”), as are in
Executive’s possession, custody or control. If requested by the Company, the
Transfer shall be accompanied by a written statement executed by Executive,
certifying that: (A) all originals and all copies of all Information have been
returned to the Company; and (B) Executive has not retained any original or copy
of any Information. Notwithstanding anything to the contrary contained in this
Section 9(c), Executive may comply with any properly issued subpoena or order of
an administrative or judicial body, provided that Executive shall give the
Company written notice of such subpoena or order at least 10 days prior to
Executive’s compliance therewith.

 

(d)          Executive shall also execute the Company’s standard confidentiality
and invention assignment agreement, as it may be updated from time to time.

 

(e)          All restrictive covenants contained in this Section 9 shall survive
termination of this Agreement.

 

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10.         Restrictive Covenants.

 

(a)          No Solicitation. Executive acknowledges and agrees that the Company
has devoted, and will devote, significant effort, time, and expense to the
creation and development of the goodwill of the customers that they serve and
the personnel that they employ, that the identities of many of the customers and
prospects represent trade secrets of the Company, and that Executive will
benefit from, and will be expected to nurture these relationships while
Executive is employed by the Company. Executive further acknowledges and agrees
that it would be unfair and would cause irreparable injury to the Company if,
following the expiration or termination of Executive’s employment with the
Company, regardless of the reason, Executive were to solicit any of the
Company’s customers with whom Executive had direct contact during Executive’s
employment with the Company to promote or sell any product or service that
competes with the Company or its affiliates, or to induce any of the Company’s
officers, directors, managers, members, employees, subcontractors or agents
(collectively, “Employees”) with whom Executive had direct contact during
Executive’s employment with the Company to terminate their relationship with the
Company. Accordingly, Executive agrees that, during the Time Period set forth in
Section 10(d) below, Executive shall not, directly or with or through any other
Person, directly or indirectly, whether as an officer, director, partner,
employee, agent, member, stockholder, or in any other capacity whatsoever: (i)
call on, solicit, divert, interfere with or take away, or attempt to call on,
solicit, divert, interfere with or take away, any of the projects, business,
clients, customers or prospects (or employees of such customers or prospects) of
the Company with whom Executive had contact during Executive’s employment with
the Company by promoting or selling any product or service that competes with
the Company or its affiliates, either for Executive’s own benefit or for any
other Person; provided that, to insure Executive’s compliance with this subpart
(i), promptly following the expiration or termination of Executive’s employment
with the Company, regardless of the reason, the Company will provide Executive a
list of customers and prospects of the Company with whom Executive had direct
contact during Executive’s employment with the Company; or (ii) solicit, attempt
to solicit, cause the solicitation of, induce or influence, or seek to induce or
influence, any employees of the Company on the effective date of Executive’s
termination with whom Executive had direct contact during Executive’s employment
with the Company (excluding any Employees who are no longer in the employ of the
Company), for employment by any Person other than the Company and/or to
terminate their relationship with the Company.

 

(b)          Non-Disparagement. Executive agrees that, during Executive’s
employment with the Company and thereafter, Executive shall not, directly or
with or through any other Person, directly or indirectly, make, issue, release,
or authorize any written or oral statements to any third Person that are
derogatory or defamatory in nature with respect to the Company, or any of their
respective members, directors, officers, employees, subcontractors or agents.

 

(c)          Irreparable Harm. The restrictive covenants contained in Section 9
and this Section 10 are, and shall be construed as constituting, agreements
independent of any other Sections of this Agreement. Executive acknowledges and
agrees that the restrictions and covenants contained in Section 9 and this
Section 10 are reasonable and necessary in order to protect the Company’s
legitimate business and proprietary interests, and that any violation thereof
would result in irreparable injury to the Company. Accordingly, if Executive
violates any of the restrictive covenants contained in Section 9 or this Section
10, then: (i) the Company shall be authorized and entitled to obtain from any
Court of competent jurisdiction preliminary and permanent injunctive relief, as
well as an equitable accounting of all profits and benefits arising out of such
violation, which rights and remedies shall be cumulative and in addition to any
other right and remedy to which the Company shall be entitled; and (ii) the
Company’s obligation to make any payment or provide any benefit under this
Agreement, including without limitation any severance payment, shall cease
immediately.

 

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(d)          Enforceability.

 

(i)          Definition of “Time Period”. For purposes of Section 10(a), “Time
Period” shall mean and include the period beginning as of the date of
Executive’s employment with the Company and ending after the shorter of (A) the
number of months after Executive ceases to be employed by the Company (for
whatever reason, whether voluntarily or involuntarily) equal to the number of
full months that Executive was actually employed by the Company under this
Agreement; or (B) 12 months after Executive ceases to be employed by the Company
(for whatever reason, whether voluntarily or involuntarily), provided, however,
that if a court of competent jurisdiction determines that such 12-month period
is unenforceable, then 6 months after Executive ceases to be employed by the
Company (for whatever reason, whether voluntarily or involuntarily).

 

(ii)         Enforceability of Covenants. Notwithstanding Section 10(d), should
any court of competent jurisdiction determine that any of the covenants in this
Agreement are unreasonable as to duration or scope, the covenants shall be
enforceable as provided herein with respect to such duration or scope as the
court determines to be reasonable.

 

(e)          Severability. The remaining provisions of this Section 10 shall not
otherwise be affected by a court’s actions described in this Section 10.

 

11.           Intellectual Property.

 

(a)           For purposes of this Agreement, the term “Intellectual Property”
shall mean and include discoveries, concepts, ideas, and improvements to
existing technology whether or not written down or otherwise converted to
tangible form, patents, designs, trademarks, trade names, goodwill, copyrights,
all rights in inventions, designs, processes, formulae, notations, improvements,
know-how, plans, models, artistic works and all other forms of industrial or
intellectual property (in each case in any part of the world and whether or not
registered or registerable and to the fullest extent thereof and for the full
period thereof and all extensions and renewals thereof) and all appplications
for registration thereof and all rights and interests, present and future,
thereto and therein.

 

(b)          Employee acknowledges that there is no Intellectual Property
conceived, designed, originated, written, discovered, developed, learned,
created, reduced to practice, or made (collectively, “Develop”, “Develops”,
and/or “Developed”, as appropriate) by Executive, alone or with others, prior to
execution of this Agreement that is not listed and described on Schedule B to
this Agreement. Executive shall promptly disclose in writing to the Company, and
to the extent necessary assign to the Company (and/or any successor, subsidiary
or affiliate thereof, as determined by the Company) any and all Intellectual
Property that Executive Develops during Executive’s employment with the Company,
whether such is Developed solely or jointly with others, whether or not
patentable or registerable under copyright or similar statutes, and whether or
not such conception, design, origination, writing, discovery, development,
creation, reduction to practice, or making involves the use of the time,
facilities, equipment or personnel of the Company (and/or any successor,
subsidiary or affiliate thereof) (“Inventions”). Executive acknowledges and
agrees that any and all such Inventions are “works for hire” under applicable
law, and all right, title and interest therein shall belong to the Company
(and/or any successor, subsidiary or affiliate thereof, as determined by the
Company). Executive further agrees to assign, and does hereby assign, to the
Company (and/or any successor, subsidiary or affiliate thereof, as determined by
the Company) all right, title and interest in and to any and all such Inventions
and agrees to execute all documents deemed necessary or desirable by the Company
in connection therewith, including patent and/or copyright assignments, and to
cooperate both during Executive’s employment and after the termination or
expiration of the Agreement, regardless of the reason, at the Company’s expense,
in all further actions deemed necessary or desirable to confirm, register,
protect or enforce the rights therein of the Company (and/or any successor,
subsidiary or affiliate thereof). Notwithstanding anything to the contrary
contained in this Section 11: (i) this Section 11 shall not apply to any
Inventions of Executive that qualify fully under the provisions of California
Labor Code Section 2870, the provisions of which are set forth in Schedule A,
and (ii) the assignment obligations and rights do not relate to any Inventions
Developed on Executive’s own time using no resources of the Company (and/or any
successor, subsidiary or affiliate thereof) and which do not relate to the
business, actual or reasonably contemplated, of the Company (and/or any
successor, subsidiary or affiliate thereof). Executive (a) represents and
warrants that Executive has identified on Schedule B all Intellectual Property,
if any, Developed by Executive (alone or with others) in which Executive claims
any ownership or other right, and (b) agrees that any Intellectual Property that
is not identified on Schedule B was not Developed before commencement of
Executive’s employment by the Company.

 

-9-

 

 

(c)          If any Person makes any claim and/or files a lawsuit or other
proceeding (collectively, “Proceedings”) against the Company alleging any
infringement of its Intellectual Property rights by reason of the use or
exploitation of any Intelletual Property rights Developed by Executive, then
Company shall indemnify, defend and hold Executive harmless from such
Proceedings; provided, however that (i) Executive will promptly give the Company
written notice of any such Proceedings; (ii) the Company will give Executive all
reasonable assistance in connection with the Proceedings at Company’s cost and
expense.

 

12.          Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive’s death and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, “successor” means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation or benefits pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. None of the obligations of Executive under this Agreement may
be assigned or transferred. Any other attempted assignment, transfer, conveyance
or other disposition of Executive’s right to compensation or other benefits will
be null and void.

 

13.          Notices. All notices, requests, demands and other communications
called for under this Agreement will be in writing and will be delivered
personally by hand or by courier, mailed by United States first-class mail,
postage prepaid, or sent by facsimile or by other electronic means directed to
the party to be notified at the address or facsimile number indicated for such
party on the signature page to this Agreement, or at such other address or
facsimile number as such party may designate by 10 days’ advance written notice
to the other parties hereto. All such notices and other communications will be
deemed given upon personal delivery, 3 days after the date of mailing, or upon
confirmation of facsimile transfer.

 

-10-

 

 

14.          Severability. In the event that any provision(s) of this Agreement
becomes or is declared by an arbitrator or a court of competent jurisdiction to
be illegal, unenforceable or void, this Agreement will continue in full force
and effect without such provision(s).

  

15.          Indemnification.

 

(a)          The Company agrees to hold Executive harmless for, from and to
defend and indemnify Executive against any and all liabilities, losses, costs,
damages and expenses including without limitation, reasonable attorneys’ fees
and expenses arising out of any acts and omissions of Executive in connection
with Executive’s position, provided, that Executive acted in good faith and in a
manner Executive reasonably believed to be in or not opposed to the best
interests of the Company and/or upon advice of the Company’s counsel or
directive of the Board.

 

(b)          Executive agrees to hold the Company harmless for, from and to
defend and indemnify the Company against any and all liabilities, losses, costs,
damages and expenses including without limitation, reasonable attorneys’ fees
and expenses arising out of Executive’s breach of this Agreement.

 

16.          Arbitration.

 

(a)          Executive and the Company agree that any dispute or controversy
arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof, will be settled by binding arbitration to be held in Costa Mesa,
California in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
“Rules”). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator will be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator’s decision in any court having jurisdiction.

 

(b)          The arbitrator(s) will apply California law to the merits of any
dispute or claim, without reference to rules of conflicts of law. The
arbitration proceedings will be governed by federal arbitration law and by the
Rules, without reference to state arbitration law.

 

(c)          EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION CLAIMS.

 

17.         Integration/Waiver. This Agreement and the confidentiality and
invention assignment agreement described in Section 9(d) above represent the
entire agreement and understanding between the parties as to the subject matter
herein and supersede all prior or contemporaneous agreements whether written or
oral. No waiver, alteration or modification of any of the provisions of this
Agreement will be binding unless in writing and signed by duly authorized
representatives of the parties hereto.

 

-11-

 

 

18.         Tax Withholding. All payments made pursuant to this Agreement will
be subject to applicable taxes and other withholdings or deductions authorized
or required by law.

 

19.         Governing Law; Consent to Personal Jurisdiction. THIS AGREEMENT WILL
BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD FOR CONFLICTS
OF LAWS PRINCIPLES. EACH PARTY EXPRESSLY CONSENTS TO THE PERSONAL JURISDICTION
OF THE STATE AND FEDERAL COURTS LOCATED IN THE CENTRAL DISTRICT OF CALIFORNIA
SUBJECT TO THE ARBITRATION PROVISION SET FORTH IN SECTION 16.

 

20.          Attorneys’ Fees. In the event of arbitration or litigation arising
from this Agreement, the prevailing party will be entitled to such party’s
reasonable attorneys’ fees and costs and expenses including expert witness fees.
For purposes of this clause, the term “prevailing party” means the net winner of
the dispute, taking into account the claims pursued, the claims on which the
pursuing party was successful, the amount of money sought, the amount of money
awarded, and offsets or counterclaims pursued (successfully or unsuccessfully)
by the other party.

 

21.         Construction of Agreement. The parties have participated jointly in
the negotiating and drafting of this Agreement. If a question concerning intent
or interpretation arises, no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of authorship.

 

22.         Captions. Titles or captions contained in this Agreement are for
convenience and are not intended to affect the substantive meaning of any
provision.

 

23.         Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

24.         Code Section 409A. To the fullest extent applicable, amount and
other benefits payable under this Agreement are intended to be exempt from the
definition of “nonqualified deferred compensation” under section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”) in accordance with
one or more of the exemptions available under the final Treasury regulations
promulgated under Section 409A and, notwithstanding anything in the Agreement to
the contrary, to the extent that any such amount or benefit is or becomes
subject to Section 409A due to a failure to qualify for an exemption from the
definition of nonqualified deferred compensation in accordance with such final
Treasury regulations, this Agreement must be interpreted and administered to the
extent possible, or amended, to comply with the applicable requirements of
Section 409A with respect to these amounts or benefits.

 

[Signature page follows]

 

-12-

 

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by their duly authorized officers, as of the day and year first
above written.

 

  “COMPANY”       Flex Power Generation, Inc.       By:      Name:      Title: 
        Address:       9400 Toledy Way   Irvine, CA 92618       Fax #:
949-616-3399       “EXECUTIVE”           Alain J. Castro       Address:      
512 N. Mcclurg Ct, #1707Chicago, IL 60611       Email: acastro@iev-ltd.com

 

 

 

 

Schedule A

California Labor Code Section 2870

 

(a) Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information, except for those inventions
that either:

 

(1) Relate at the time of conception or reduction to practice of the invention
to the employer's business, or actual or demonstrably anticipated research or
development of the employer; or

 

(2) Result from any work performed by the employee for the employer.

 

(b) To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.

 

 

 

 

Schedule B

 

1.          Proprietary Information. Except as set forth below, I acknowledge
that at this time I know nothing about the business or proprietary information
of the Company, other than information I have learned from the Company in the
course of being hired:
 ____NONE________________________________________________________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.          Reserved Creations. Except as set forth below, there are no ideas,
processes, inventions, technology, writings, programs, designs, formulas,
discoveries, patents, copyrights, or trademarks, or any claims, rights, or
improvements to the foregoing, that I wish to exclude from the operation of this
Agreement: ____NONE____________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature:           Print Name:  Alain J. Castro       Date: