Exhibit 10.20

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (“Agreement”) is made and entered into as of the 25th
day of October, 2012 (the “Effective Date”), and is by and between POWERVERDE,
INC., a Delaware corporation (the “Company”), and WASTE HEAT SOLUTIONS, LLC, a
California limited liability company (the “Consultant”).

 

R E C I T A L S

 

A.HANK LEIBOWITZ, the principal of the Consultant (the “Principal”) is an expert
in the field of advanced energy systems; and

 

B.The Principal possesses knowledge and skills which the Company believes will
be of substantial benefit to its operations and success; and the Company wishes
for the Consultant, through Principal, to provide design engineering consulting
and other technical services to the Company according to the terms and
conditions of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:

 

1.          Consulting Services. The Company hereby retains the Consultant to
provide the services described herein on the terms and conditions set forth
herein, and the Consultant agrees to provide such services exclusively through
Principal.

 

2.          Duties of Principal. During the Consulting Period (as defined in
Section 3, below), the Consultant shall cause the Principal to diligently
provide such design engineering and other technical services (the “Services”) as
may be reasonably assigned to the Principal by the CEO of the Company and to
exercise such power and authority as may from time to time be delegated to the
Principal by the CEO. The Principal’s duties will be described in a Company job
description, or will otherwise be determined by the Company after consultation
with the Principal. During the Consulting Period, the Principal will faithfully
carry out his responsibilities and provide services to the Company on a
part-time basis at such hours as may be necessary for the Principal to perform
effectively the responsibilities of the position. In addition, the Principal
shall act in accordance with (i) standing instructions for the position which
may be issued by the Company from time to time; (ii) all reasonable and lawful
requests, directions and/or restrictions imposed by the Company; and (iii) all
policies of the Company as prescribed from time to time. Upon termination of the
Consulting Period, the Principal shall return all Company equipment and other
Company property in the Principal’s possession, custody or control.

 

3.          Term. The Consultant shall provide the Services to the Company
commencing on the Effective Date of this Agreement. The Agreement shall continue
for a period of one year (the “Initial Term”), unless this Agreement is
terminated first pursuant to Article 6. If not previously terminated, at the end
of the Initial Term the Agreement shall be automatically renewed for an
additional term of one year, and it shall similarly be renewed on future
one-year anniversary dates (“Renewal Terms”) until the Agreement is terminated
pursuant to Article 6. The entire term of the Agreement (comprised of that part
of the Initial Term, and any Renewal Terms, prior to termination) shall be
referred to in this Agreement as the “Consulting Period.” For all purposes of
the Agreement, no termination of the Consulting Period shall be deemed to have
occurred if the Consultant’s Services are transferred during the Consulting
Period to any business entity which is an Affiliate of the Company. As used in
this Agreement, the term “Affiliate” means, with respect to any specified person
or entity (“Person”), any other Person that, directly or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with, such specified Person.

 

 

4.          Compensation.

 

(a)        Base Compensation. The Consultant shall receive compensation from the
Company during the Initial Term in the amount of $5000 per month through
February 2013 and $7500 per month thereafter (the “Compensation”). The
Compensation shall be payable without any deductions by the Company on the first
day of each month. Consultant and Principal shall be solely responsible for
payment of all income and withholding taxes applicable to the Compensation.
After the Initial Term, the Company may increase the Consultant’s Compensation
in its sole discretion.

 

(b)        Stock Options.

 

             (i)          The Consultant shall be granted a 10-year option (the
“First Option”) to purchase from the Company 500,000 shares of Common Stock, at
an exercise price of $.56 per share. The parties shall execute a separate Stock
Option Agreement (the “First Stock Option Agreement”) as of the Effective Date,
and the First Stock Option Agreement will more fully describe the Principal’s
stock option rights. The shares of stock that may be purchased upon the exercise
of the First Option shall be fully vested upon the execution of this Agreement.

 

             (ii)         The Consultant shall be granted a 10-year option (the
“Second Option”) to purchase from the Company 500,000 shares of Common Stock, at
an exercise price of $.56 per share. The parties shall execute a separate Stock
Option Agreement (the “Second Stock Option Agreement”) as of the Effective Date,
and the Second Stock Option Agreement will more fully describe the Consultant’s
stock option rights. The shares of stock that may be purchased upon the exercise
of the Second Option are referred to in this Agreement as the “Second Option
Shares.” The Second Option will be exercisable beginning six months from the
date of this Agreement, provided that the Principal continues to provide
Services to the Company through such date. The Second Option shall terminate in
the event that this Agreement is terminated or the Principal ceases performing
the Services within six months from the date hereof based on termination by the
Company for breach by Consultant or voluntary termination by Consultant.

 

             (iii)        The First Option and Second Option shall be
transferred to Principal’s estate in the event of Principal’s death.

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(c)        Bonus.

 

            Consultant shall be eligible for performance-based bonus
compensation, to be determined by the Company’s Board of Directors in its
discretion.

 

5.          Expense Reimbursement.

 

Subject to such reasonable rules and guidelines as the Company may from time to
time adopt for its executives and consultants generally, the Company shall
reimburse the Consultant for all reasonable expenses actually paid or incurred
by the Consultant during the Consulting Period in the course of and pursuant to
the business of the Company. The Consultant shall account to the Company in
writing for all expenses for which reimbursement is sought and shall supply to
the Company copies of all relevant invoices, receipts or other evidence
reasonably requested by the Company.

 

6.          Termination of Agreement.

(a)        Termination. The Company and/or Consultant shall have the right to
terminate this Agreement at any time without Cause immediately upon 30 days’
prior written notice thereof. The Company shall have the right to terminate this
Agreement at any time for Cause without prior notice thereof. Cause shall
include, but is not limited to, the Principal resigning or being removed from
the employ of the Consultant, as well as the Principal refusing to provide
Services to the Company in accordance with the terms and conditions of this
Agreement. The Consulting Period shall terminate automatically upon the
dissolution of the Consultant or the Principal’s death.

 

(b)        Payment(s) to Consultant Following Termination. Upon the termination
of this Agreement hereunder for any reason, the Company shall only be obligated
to pay to the Consultant on the date of such termination (i) the Consultant’s
Compensation accrued through the date of termination and (ii) in the event of
termination by the Company without cause, three months’ Compensation. The
Company shall have no further liability hereunder (other than for reimbursement
of reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 5 above).

(c)        Resignation. Upon any notice of termination of the Agreement pursuant
to this Article 6, the Principal or any representative of the Consultant shall
automatically and without further action be deemed to have resigned as an
officer and/or director of the Company if the Principal or a representative of
the Consultant was then serving in any such position, and if required by the
Company, the Consultant hereby agrees to cause the immediate execution of a
resignation letter by the Principal or Consultant’s representative to the
Company.

(d)        Survival. The provisions of this Article 6 shall survive the
termination of this Agreement, as applicable.

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7.          Restrictive Covenants.

(a)        Confidentiality. Except as required in the performance of the
Services, Consultant shall not directly or indirectly use or disclose any Trade
Secret Information (as defined below), either during or after the Consulting
Period for so long as such information remains Trade Secret Information as
defined herein. Except as required in the performance of Consultant’s work for
the Company, during the Consulting Period and for a period of two years
thereafter (the “Restrictive Period”), Consultant shall not directly or
indirectly use or disclose any Confidential Information (as defined below), and
not circumvent, avoid, bypass, or obviate, directly or indirectly, the intent of
this Agreement. The Consultant agrees that the Confidential Information is the
exclusive property of the Company and in furtherance thereof, the Consultant
covenants with the Company not to engage in any conversations, negotiations,
correspondence or any transactions with respect to the Confidential Information,
or take any other actions involving the Confidential Information, whether
directly or indirectly, or whether on the account of the Consultant and/or
Principal or not, which will not be in the best interests of the Company or will
not be within the intent of this Agreement, without express written consent of
the Company, which consent shall be in the sole discretion of the Company and
which consent may be unreasonably withheld.

As used herein, “Trade Secret Information” means any information possessed by
the Company which derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use. For purposes of this Agreement, “Trade Secret Information” includes both
information disclosed to Consultant by the Company and information otherwise
acquired or developed by Consultant in the course of its service to the Company.
As used herein, “Confidential Information” means any information possessed by
the Company which is not readily ascertainable by proper means by other persons,
regardless of whether such Confidential Information has independent economic
value. Any information that Consultant can demonstrate is publicly available
through no fault of Consultant or others with a duty or other obligation of
confidentiality to the Company (contractual or otherwise), is not Trade Secret
Information or Confidential Information within the meaning of this Agreement.

Notwithstanding anything else in this Agreement, Trade Secret Information shall
include, but is not limited to: (i) information concerning the Company’s
management, financial condition, financial operation, purchasing activities,
pricing formulas, existing and contemplated products and services, sales
activities, marketing research, marketing plans, marketing activities, and
business plans; (ii) information acquired or compiled by the Company concerning
actual or prospective customers, including, but not limited to, their
identities, their business operations, their finances, the identity and quantity
of products or services purchased from the Company, and other unpublished
information furnished by or about them to the Company; (iii) the Company’s
software (including source code, object code and related documentation), its
software requirements and design documentation, its product development plans,
its security procedures, methods and vulnerabilities (including, without
limitation, all passwords and user ids), the algorithms, methods and procedures
used within the Company’s software, and all ideas and proposals, whether
generated internally or not, relating to the design, operation, implementation,
use and maintenance of the Company’s software; (iv) all Inventions (as defined
in Section 7(c)(2), below), regardless of whether such Inventions have been
reduced to practice or are subject to patent protection; and (v) all other types
and categories of information (in whatever form) with respect to which, under
all the circumstances, Consultant knows or has reason to know that the Company
intends or expects secrecy to be maintained and as to which the Company has made
reasonable efforts to maintain secrecy.

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The Company may, from time to time, inform Consultant of restrictions upon the
use or disclosure of specified information which has been licensed or otherwise
disclosed to the Company by third parties pursuant to license or confidential
disclosure agreements which contain restrictions upon the use or disclosure of
such information. Consultant agrees that such information shall be treated as
Confidential Information under this Agreement, and, in addition, Consultant
agrees to abide by the restrictions upon use and/or disclosure contained in such
agreements.

Consultant shall not directly or indirectly use or disclose to the Company any
confidential or proprietary information belonging to others, and Consultant
represents that this Agreement does not and will not require the use or
disclosure of such information or the violation of any confidential relationship
with any third party.

(b)        Other Property of the Company. All documents, encoded media, and
other tangible items provided or made accessible to Consultant by the Company,
or generated or created by Consultant in connection with any business activity
of the Company, are and shall remain the property of the Company.

Upon termination of this Agreement, Consultant will promptly deliver to the
Company all such documents, media, and other items in Consultant’s possession,
including all complete or partial copies, recordings, abstracts, notes or
reproductions of any kind made from or about such documents, media, items or
information contained therein.

Neither Consultant nor Principal will have nor claim any right, title, or
interest in any Invention, patent, copyright, trademark, service mark or trade
name (or any application released thereto) owned or used by the Company.

(c)        Ownership of Developments.

             (1)        Work Product. All work, writing, material, copyrights,
patents, trade secrets, or other intellectual property rights associated with
any ideas, concepts, techniques, Inventions (as defined below), processes, or
works of authorship developed or created by Consultant or Principal during the
course of performing work for the Company or its clients, including, but not
limited to, CHP, CCHP, waste heat systems, Rankin cycle technologies, renewable
technologies and power consumption technologies, (collectively, “Work Product”)
shall belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Consultant for hire for the Company within the
meaning of Title 17 of the United States Code; provided, however, that Work
Product shall not include developments and creations to the extent that they are
applicable to generators with capacity over 300kW (“Large Generators”). To the
extent the Work Product may be considered work made by the Consultant for hire
for the Company, the Consultant hereby assigns and shall cause the Principal to
assign all right title and interest the Consultant and/or Principal has or may
have in such Work Product to the Company, and Consultant further agrees to and
shall cause the Principal to execute any assignments or similar documents
requested by the Company in the future to further evidence and document the
Company’s rights in and to any Work Product, and to do so without any
requirement of further consideration, even if such request is made after this
Agreement expires or terminates.

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For the purposes of this Section 7(c), “Work Product” shall include, without
limitation, all work relating in any way to the business of the Company that is
conceived or created, in whole or in part, by the Consultant and/or Principal
during the Consulting Period, regardless of whether such creation is performed
during normal working hours or with the use of Company equipment, all copies of
such work in any medium whatsoever in the Consultant and/or Principal’s control
or possession, and all derivative works of such work authored in whole or in
part by the Consultant and/or Principal, with the exception of work involving
Large Generators.

(2)         Inventions. As used herein, “Invention” means any discovery,
improvement, innovation, idea, formula, or shop right (whether or not
patentable, whether or not put into writing, and whether or not put into
practice) made, generated, or conceived by Consultant and/or Principal (whether
alone or with others, whether or not patentable, whether or not put into
writing, and whether or not reduced to practice) during the Consulting Period
that relates in any way to the Company’s products, services, market, business
methods, operations or product plans, with the exception of inventions to the
extent applicable to Large Generators. For purposes of this Agreement, any
Invention relating to the business of the Company or to the Company’s actual or
demonstrably anticipated research or development with respect to which
Consultant and/or Principal files a patent application within one year after
termination of the Consulting Period shall be presumed to be an Invention
conceived by Consultant and/or Principal during the Consulting Period,
rebuttable only by accurate, written and duly corroborated evidence that such
Invention was not first conceived by Consultant and/or Principal until after the
termination of the Consulting Agreement.

Consultant further agrees and shall cause Principal to agree that all Inventions
generated, made or conceived by Consultant and/or Principal during the
Consulting Period shall also be solely owned by the Company, and Consultant and
Principal hereby irrevocably assign to the Company all of its/his right, title
and interest in and to any and all Inventions. Consultant shall promptly
disclose all Inventions to the Company in writing.

Consultant further agrees and shall cause Principal to agree to execute any
assignments or similar documents requested by the Company to further evidence
and document the Company’s rights in and to any Inventions, and to cooperate
with Company, at the Company’s expense, in obtaining letters patent or
equivalent protection for such Inventions in any and all locations and
jurisdictions Company may choose in its sole discretion throughout the world,
and to do so without any requirement of further consideration, even if such
request is made after this Agreement expires or terminates.

        (d)        Definition of Company. Solely for purposes of this Article 7,
the term “Company” also shall include any existing or future subsidiaries of the
Company.

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        (e)        Covenant Not to Compete. (i) During the Consulting Period and
for one year thereafter, Consultant shall not and shall cause Principal to not,
as an employee, officer, director, contractor, broker, distributor, advisor,
consultant, or owner, or in any other capacity, directly or indirectly
participate or assist in: (A) the design, development, production, marketing or
sales of any product or service competitive with any product or service which
the Company markets or plans to market at the time of termination of the
Consulting Period; or (B) the management or financing of a business enterprise
engaged in any such activities. The geographic territory within which Consultant
and Principal will refrain from such activities shall be the United States of
America, the countries which are members of the European Union and any other
geographic territory within which the Company or any Company agent or
representative markets or plans to market any such products or services at the
time of termination of the Consulting Period (“Restricted Area”).
Notwithstanding the foregoing, the restrictions of this Section 7(e) shall not
apply to work and business relating to Large Generators. Notwithstanding the
foregoing, the restrictions set forth in this Section 7(e) shall not apply in
the event that Consultant’s services are terminated by the Company without
cause.

(f)        Non-Solicitation of Customers. During the one-year period after the
date of termination of the Consulting Period, Consultant shall not and shall
cause Principal to not, directly or indirectly, either (i) solicit, divert, take
away or accept, or attempt to solicit, divert, take away or accept, the business
of any Restricted Customer (as defined below) for any product or service (other
than Large Generators) offered by the Company within the Restricted Area; or
(ii) attempt or seek to cause any Restricted Customer to refrain, in any
respect, from acquiring from or through the Company any product or services
(other than Large Generators) offered by the Company within the Restricted Area.
As used herein, the term “Restricted Customer” means any customer to whom or to
which goods or services were provided by the Company during the two-year period
prior to the Consulting Period, and any potential customer of the Company that
the Company solicited during the one-year period prior to the date of
termination of the Consulting Agreement. Notwithstanding the foregoing, the
restrictions set forth in this Section 7(f) shall not apply in the event that
Consultant’s services are terminated by the Company without cause.

(g)        Non-Solicitation of Employees. During the one-year period after the
date of termination of the Consulting Period, Consultant shall not and shall
cause Principal to not, as to work within the Restricted Area, directly or
indirectly solicit, request or induce any employee of the Company to terminate
employment with the Company and seek employment with another firm other than the
Company; provided, however, that a general advertisement in a medium of general
public circulation with respect to a particular employment position that is not
targeted at any one or more the employees of the Company will not violate the
covenants of this Section. Notwithstanding the foregoing, the restrictions set
forth in this Section 7(g) shall not apply in the event that Consultant’s
services are terminated by the Company without cause.

(h)        [intentionally deleted]

(i)         Requests for Clarification. In the event Consultant is uncertain as
to the meaning of any provision of this Agreement or its application to any
particular information, item or activity, Consultant shall inquire in writing to
the CEO of the Company, specifying any areas of uncertainty. The Company will
respond in writing within a reasonable time and will endeavor to clarify any
subject of uncertainty, including such things as whether it considers particular
information to be its Trade Secret Information or whether it considers any
particular activity or employment to be in violation of this Agreement.

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(j)         Notice to Subsequent Employers and Contractors. For a period of one
year after termination of the Consulting Period, Consultant shall and shall
cause Principal to inform any prospective new employer or contractor (before
accepting employment or entering into a services agreement) of the terms of this
Agreement. In addition, it is agreed that the terms of this Agreement are not
confidential, and that the Company may disclose the provisions of this
Agreement, without any liability whatsoever, to any person, including, without
limitation, one that is engaged in a business relationship with Consultant
and/or Principal, and may indicate that it is believed that Consultant and/or
Principal is in violation of this Agreement.

(k)        Acknowledgment by Consultant and Principal. The Consultant
acknowledges and confirms and shall cause the Principal to acknowledge and
confirm that (i) the restrictive covenants contained in this Article 7 are
reasonably necessary to protect the legitimate business interests of the
Company; and (ii) the restrictions contained in this Article 7 (including,
without limitation, the length of the term of the provisions of this Article 7)
are not overbroad, overlong, or unfair and are not the result of overreaching,
duress or coercion of any kind.

(l)         Reformation by Court. In the event that a court of competent
jurisdiction shall determine that any provision of this Article 7 is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Article 7 within the jurisdiction of such
court, such provision shall be interpreted and enforced as if it provided for
the maximum restriction permitted under such governing law.

(m)       Survival. The provisions of this Article 7 shall survive the
termination of this Agreement, as applicable.

8.          Injunction. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Consultant and/or Principal of any of the covenants
contained in Article 7 of this Agreement will cause irreparable harm and damage
to the Company, the monetary amount of which may be virtually impossible to
ascertain. As a result, the Consultant recognizes and hereby acknowledges that
the Company shall be entitled to seek an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the
covenants contained in Article 7 of this Agreement by the Consultant and/or the
Principal or any of the Consultant and/or Principal’s Affiliates, associates,
partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other remedies the
Company may possess.

9.          Assignment. Neither party shall have the right to assign or delegate
the Consultant’s rights or obligations hereunder, or any portion thereof, to any
other person.

10.        Governing Law. This Agreement shall be construed and enforced
according to the laws of the State of Florida. The parties agree to accept any
service of process by mail and accept the exclusive jurisdiction and venue of
the state and federal courts located in Miami-Dade County, Florida, with respect
to any and all litigation arising out of this Agreement and the Services and
transactions contemplated hereby. Each party irrevocably waives any argument to
the effect that any such court is an inconvenient forum.

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11.        Entire Agreement; Amendment. This Agreement and the relevant Stock
Option Agreements referred to herein constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings and arrangements, both oral and written,
between the Consultant and/or Principal and the Company (or any of its
Affiliates) with respect to such subject matter. This Agreement may not be
modified in any way unless by a written instrument signed by both the Company
and the Consultant.

12.        Notices. All notices required or permitted to be given hereunder
shall be in writing and shall be personally delivered by courier, sent by
registered or certified mail, return receipt requested or sent by confirmed
facsimile transmission addressed as set forth herein. Notices personally
delivered, sent by facsimile or sent by overnight courier shall be deemed given
on the date of delivery and notices mailed in accordance with the foregoing
shall be deemed given upon the earlier of receipt by the addressee, as evidenced
by the return receipt thereof, or three days after deposit in the U.S. mail.
Notice shall be sent: (i) if to the Company, addressed to PowerVerde, Inc., 420
S. Dixie Highway, Suite 4B, Coral Gables, Florida 33146, Attention: Richard H.
Davis, CEO, and (ii) if to the Consultant, addressed to Waste Heat Solutions,
LLC 2010 Crow Canyon Pl., Suite 300, San Ramon, CA 94583 Attention: Hank
Leibowitz, President, or to such other address as either party hereto may from
time to time give notice of to the other.

13.        Benefits; Binding Effect. This Agreement shall be for the benefit of
and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns, including, without limitation, any successor to the Company, whether by
merger, consolidation, sale of stock, sale of assets or otherwise.

14.        Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law.

15.        Waivers. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.

16.        Damages. Nothing contained herein shall be construed to prevent the
Company or the Principal from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his or her 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 each party shall pay its own court costs and attorneys’ fees
related thereto.

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17.        Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

18.        Applicability to Principal Where the context reasonably requires, all
references herein to Consultant shall include Principal and vice versa, and
Consultant shall cause Principal to comply with all terms and conditions of this
Agreement applicable to Consultant.

[Signatures Begin on Following Page.]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

  

  COMPANY:         POWERVERDE, INC.         By: /s/ Richard H. Davis     Richard
H. Davis, CEO         CONSULTANT:         WASTE HEAT SOLUTIONS, LLC         By:
/s/ Hank Leibowitz     Hank Leibowitz, President

 

JOINDER

 

The undersigned Principal of Consultant joins in the foregoing Agreement for
purposes of Section 7 thereof.

 

    /s/ Hank Leibowitz     Hank Leibowitz

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