Document:

exv10w23

 

EXHIBIT 10.23

CONSULTING AGREEMENT

     This Consulting Agreement {“Agreement”) is made effective and entered into as of October
1, 2004; by and between Save the World Air, Inc., a Nevada corporation (the “Company”), and
John Fawcett (“Consultant”), with reference to the following facts:

RECITALS

     A. The Company has developed proprietary technologies for reducing harmful emissions from fuel
combustion engines and improving fuel efficiency, among other benefits. The development of these
proprietary technologies and enhancements to them, as well as the anticipated manufacturing,
distribution and sale of products derived from them, are sometimes referred to below as the
Company’s “Business.” The Company’s current products are known as the ZEFS device, as described in
the Company’s patent applications which are pending in various countries (the “ZEFS Product”). The
Company is currently engaged in research and development for next-generation products
and enhancements for use with diesel engines (“Diesel Product”), multiport or muitipoint electronic
fuel injection (“EFI Product”), each of which may consist of a device that is attached to an engine
or to a component that is attached to the engine or a technology that is incorporated into an
engine or a component attached to an engine. The ZEFS Products, Diesel Products and EFI Products
are sometimes referred to collectively in this Agreement as the “Products.”

     B. The parties hereto anticipate that the Products will be based on the ZEFS Product or new
technologies developed pursuant to this Agreement and certain related consulting agreements being
entered into between the Company and certain others who are part of the Company’s R&D team.

     C. The Company desires to engage the services of Consultant to assist the Company in research
and development, including without limitation, prototype testing and making available certain
Consultant facilities and Consultant employees, and to provide other services and assistance to
the Company in matters relating to the Company’s business, as they may arise from time to time,
upon the terms and conditions contained herein.

     D. Consultant desires to provide services to the Company upon the terms and conditions
contained herein.

     E. This Agreement renews and supersedes the Consulting Agreement, dated as of December 1,
2001, between the Company and the Consultant.

     NOW THERFORE, the Company and Consultant hereby mutually agree as follows:

(a) Scope of Services to Be Provided. Consultant shall provide to the Company, on an as
needed basis, assistance, advice and support relating to the Company’s business, including
prototype testing and making available certain Consultant facilities and Consultant
employees, as the Company may request from time to time, including no less than thirty
prototype tests. Without limiting the generality of the foregoing, Consultant shall keep and
maintain such procedures as may be customary and appropriate and as may be specified by the
Company to

 

 

protect, maintain and keep confidential any proprietary or confidential information of the Company,
including without limitation all know how and information that may constitute a trade secret or
otherwise confer strategic or competitive advantages to the Company, by use of passwords, locked
cabinets, identification of such information and materials as “Confidential” and other limits on
access as may be customary or appropriate or set forth in Company policies.

     Section 2. Non-Disclosure Obligations. Concurrently with the parties’ execution of this
Agreement, Consultant shall execute and deliver to the Company the Confidentiality Agreement
attached hereto as Annex B (the “Confidentiality Agreement”), the provisions of which are
incorporated herein by this reference.

     Section 3. Consultant’s Representations and Covenants. Consultant represents, warrants and
covenants to the Company that:

          (a) Consultant shall devote such time, energy, interest; ability, and skill as may be fairly
and reasonably necessary ±o provide to the Company the services described in Section 1 above.

          (b) Consultant shall not, during the term of this Agreement, directly or indirectly, promote,
participate, or engage in any business activity that would materially interfere with the
performance of Consultant’s duties under this Agreement or which is competitive with the Company’s
or any Company Affiliate’s business; including, without limitation, any involvement as a
shareholder, director, officer, employee, partner, joint venturer, consultant, advisor, individual
proprietor, lender, or agent of any business, without the prior written consent of the Company. The
term “Affiliate” shall mean, with respect to any person or entity, any other person or entity
which, directly or indirectly through one or more intermediaries, is in control of, is controlled
by or is under common control with, such person or entity. “Control of “ “controlled by” and “under
common control with” mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management policies of a person or entity, by contract or credit arrangement,
as trustee or executor; or otherwise. The term “Affiliate” includes, but is not limited to, each
and every subsidiary of the Company.

          (c) During the term of this Agreement and for a period of one year after the termination of
this Agreement, Consultant shall not solicit. attempt to solicit, or cause to be solicited any
customers of the Company for purposes of promoting or selling products or services which are
competitive with those of the Company, nor shall Consultant solicit, attempt to solicit. or cause
to be solicited any employees, agents, or other independent contractors of the Company to cease
their relationship with the Company.

          (d) Consultant does not nave any agreements with or other person or entity which
conflict with any of Consultant’s obligations to the Company arising under this Agreement.

          (e) Consultant shall maintain any and a11 licenses and permits as may be required for
Consultant to provide the consulting services contemplated hereby. In the event Consultant shall
utilize the services or shall require any products in order to render the consulting services or
shall acquire any products in order to render the consulting services contemplated hereby,
Consultant shall solely be responsible for the payment

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for such services and products, except to the extent reimbursable by the Company in accordance with
Section 7 below. Consultant shall be solely responsible for any and a11 income and other taxes that
may be due to any state, local or federal governmental authorities in respect of the compensation
to Consultant pursuant to this Agreement. Consultant acknowledges that the Company shall not make
any withholdings from payments to Consultant hereunder.

          (f) Except upon the express written consent of the Company, Consultant shall have no
authority, and shall not represent, suggest or imply that Consultant has the authority, express or
implied: (1) to bind the Company to any agreements or arrangements, written or oral; (2) to make an
offer or accept an offer on behalf of the Company; or (3) to make representations, warranties,
guaranties, commitments or covenants on behalf of Company.

     Section 4. Ownership.

          (a) The compensation payments set forth herein shall be full and complete compensation both
for all obligations assumed by Consultant hereunder and for any and ail Creations (as defined in
the Confidentiality Agreement) assigned under this Agreement.

          (b) The Company shall retain the exclusive right to use or distribute, at its sole discretion,
any and all Creations. Consultant shall make no claim on any consideration received by the Company
for the sale, lease or use of the Creations.

          (c) The Company shall include Consultant’s profile on its Company website with other members
of the R&D team and may include such information as it deems appropriate in the Company’s Product
and marketing materials.

     Section 5. Term. This Agreement shall terminate on October 31, 2006, unless earlier terminated
in accordance with this Section 5. In addition, this Agreement shall terminate automatically upon
the death of Consultant, or the mental or physical incapacity of Consultant
for a period of 60 consecutive days. Either party hereto may terminate this Agreement upon a
material breach of this Agreement by the other party; and the Company may terminate this
Agreement upon a material breach of the Confidentiality Agreement by Consultant.

     Section 6. Compensation. Consultant’s compensation for his consulting services hereunder shall
be as set forth on Annex C hereto.

     Section 7. Reimbursement of Business Expenses. To the extent Consultant is authorized by the
Company to order equipment and supplies or mane other expenditures, to carry out
Consultant’s duties hereunder, the Company shall reimburse Consultant far the actual costs thereof,
subject to receipt of such documentation and other information as the Company may reasonably
request or require in accordance with its policies, and subject further to any limitations on the
amount that Consultant may be authorized to incur in ordering such equipment supplies or making
other expenditures on the Company’s behalf. Reimbursement for each qualifying expense shall be made
on the last day of the calendar month following the month in which a receipt for payment by
Consultant of such expense item and any and all other documentation which the company may
reasonably require regarding the expense item was submitted to the company.

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     Section 8. Independent Contractor. Consultant shall be retained by the Company only for
the purposes and to the extent set forth in this Agreement, and his relation to the Company, during
the term of this Agreement; shall be that of an independent contractor. Consultant shall not be
considered as having an employee status.

     Section 9. Injunctive Relief. Remedies at law shall be deemed to be inadequate for any breach
of any of the covenants of this Agreement, and the Company shall be entitled to injunctive relief
in addition to any other remedies it may have in the event of such breach.

     Section 10. Amendments; Consents. No amendment, modification; supplement, termination, or
waiver of any provision in this Agreement, and no consent to any departure therefrom, shall be
effective unless in writing and signed by both Consultant and the Company and then only in the
specific instance and for the specific purpose given.

     Section 11. Notices. Any notices required or permitted to be given in writing will be deemed
received when personally delivered or, if earlier, ten (10) days after mail
registered or certified United States mail, postage prepaid, and return receipt requested. Notice
to the Company is valid if sent to the Company’s principal place of business and notice to
Consultant is valid if sent to Consultant at Consultant’s address as it appears in the Company’s
records. The Company or Consultant may change their address only by notice given to the other in
the manner set forth herein.

     Section 12. Counterparts; Facsimile Signatures. This Agreement may be executed in two or more
counterparts, and the counterparts, taken together, shall constitute one original. Executed copies
of this Agreement and any amendments or modifications thereto may be delivered by facsimile
transmission in lieu of an original.

     Section 13. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of Consultant and the Company and their respective permitted successors and assigns. This
Agreement, including the rights and obligations hereunder, shall not be assigned, delegated or

     Section 14. Integration; Construction. This Agreement (together with the appendices thereof
shall comprise the complete and integrated agreement of the Company and Consultant and shall
supersede all prior agreements; written or oral, on the subject matter hereof, Neither party hereto
shall have a provision construed against it by reason of such party having drafted the same.
Transferred by Consultant without the prior written consent of the Company.

     Section 15. Survival. The rights and obligations provided in Section 3(b), Section4, Section
9, Section 13, Section 19 and paragraph (a) of Annex C hereto shall survive termination of this
Agreement.

     Section 16. Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.

     Section 17. Severability of Provisions. Any provisions in this Agreement that is held to be
operative, enforceable, or invalid in any jurisdiction shall be, as that jurisdiction only,
inoperative, unenforceable, or invalid without affecting the remaining provisions that

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jurisdiction or the operation, enforceability, or validity of those provisions in any other
jurisdiction, and to this end the provisions of this Agreement shall be severable.

     Section 18. Headings. Headings of this Agreement are included for convenience only and shall
not be considered a part of this Agreement for any other purpose.

     Section 19. Attorneys’ Fees. In the event of any litigation or other dispute arising as a
result of or by reason of this Agreement, the prevailing party in any such litigation or other
dispute shall be entitled to, in addition to any other damages assessed, its reasonable attorneys’
fees, and all other costs and expenses incurred in connection with settling or resolving such
dispute. The attorneys’ fees which the prevailing party is entitled to recover shall include fees
for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until
the final judgment is satisfied in full. In addition to the foregoing award of attorneys’ fees to
the prevailing party, the prevailing party in any lawsuit on this Agreement shall be entitled to
its reasonable attorneys’ fees incurred in any post judgment proceedings to collect or enforce the
judgment. This attorneys’ fees provision is separate and several and shall survive the merger of
this Agreement into any judgment.

     Section 20. Waiver; Rights and Remedies. Neither Consultant’s nor the Company’s
failure to exercise any right under this Agreement shall constitute a waiver of any other term or
condition of this Agreement with respect to any other preceding, concurrent, or subsequent breach,
nor shall it constitute a waiver by the Company or Consultant of its rights at any time thereafter
to require exact and strict compliance with any of the terms of this Agreement. The rights and
remedies set forth in this Agreement shall be in addition to any other rights or remedies which may
be granted by law.

(signature page follows)

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     IN WITNESS WHEREOF, the parties hereto have executed or caused their respective duly authorized
officer to execute this Agreement as of the date first set forth above.

	 	 	 	 	 
	 	CONSULTANT

 
 	 
	 	By  	/s/ John B. Fawcett
 	 
	 	Name:  	John B. Fawcett 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	SAVE THE WORLD AIR, INC.

 
 	 
	 	By  	/s/ Eugene E. Eichler
 	 
	 	Name:  	Eugene E. Eichler 	 
	 	Title:  	President 	 

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ANNEX A

CONSULTANT’S DUTIES AND RESPONSIBILITIES

	 	•  	Making available facilities and personnel in order to design, develop and test new
configurations and units.
	 
	 	•  	Assist in preparatory reports to the Company in relation to the ZEFS and other devices.

 

 

ANNEX B

CONFIDENTIALITY AGREEMENT

(To be attached)

 

 

CONFIDENTIALITY AGREEMENT

     This Confidentiality Agreement {“Agreement"} which constitutes Annex B, is entered
into by and between the individual whose name appears on the signature page of the related
Consulting Agreement (“Consultant”), on the one hand, and Save the World, Air, Inc., a
Nevada corporation (the “Company”), on the other, with reference to the following facts:

RECITALS

	     	A.  	This Agreement is being entered into pursuant to that certain
Consulting Agreement of even date herewith, between the Company and
Consultant (“Consulting Agreement”).
	 
	 	B.  	The Company has retained the services of Consultant to conduct
further research and development on a work-for-hire basis.
	 
	 	C.  	The Company desires to protect various proprietary and
confidential information that it uses in its business.

     Therefore, the parties hereto do hereby agree as follows:

	     	1.  	Definition of Confidential Information.

               (a) For the purposes of this Agreement, the term “Confidential Information” shall mean
information, material and trade secrets (i) proprietary to the Company or to any Affiliate (as
defined below) of the Company or {ii} designated as confidential by the Company, whether or not
owned or developed by the Company, which Consultant may obtain knowledge of or access to, through
or as a result of, Consultant’s relationship with the Company or with any Affiliate of the Company:

               (b) Without limiting the generality of the foregoing, Confidential Information shall include,
but is not limited to, the following types of information and other information of a similar nature
{whether or not reduced to writing or still in development}:

	                	(i)  	The “Technology,” which means:

	 	(1)  	Any and all “Creations” as defined below; and
	 
	 	(2)  	any and all enhancements thereto,

	 	(ii)  	Economic and financial analyses, marketing technique and materials,
marketing and development plans, customer names and other information related to
customers, price lists, pricing policies, financial information and consultant
files.
	 
	 	(iii)  	Information constituting a “trade secret” as defined in
California Civil Code Section 3426.1
	 
	 	(iv)  	Any information described above which the company obtains
from another party and which the Company treats as proprietary and
designates as

 

 

	 	   	Confidential Information, whether or not owned or developed by the
Company.

               (c) The term “Creations” shall mean any and all discoveries, ideas, inventions, concepts;
software in various states of development, designs, drawings, specifications, techniques, models,
data, source code; object code, documentation, diagrams, flow charts, research, developments,
processes, procedures, “know-how,” any enhancements to the foregoing and Consultant’s files that may be conceived or developed by Consultant, either alone or with others, during the term of this
Agreement, whether or not conceived or developed during Consultant’s working hours; that relate to
the Products or the Company’s Business (each as defined in the Consulting Agreement) or to the
Company’s actual or demonstrably anticipated research and development, or that result from any
services rendered by Consultant for the Company.

               (d) The term “Affiliate” shall mean, with respect to any person or entity, any other person or
entity which, directly or indirectly through one or more intermediaries, is in control of, is
controlled by or is under common control with such person or entity. “Control of, “controlled by”
and “under common control with” mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management policies of a person or entity, by contract or credit
arrangement; as trustee or executor or otherwise. The term “Affiliate” includes, but is not limited
to, each and every subsidiary of the Company, if any.

               (e) INFORMATION PUBLICLY KNOWN THAT IS GENERALLY EMPLOYED BY THE TRADE AT OR AFTER THE TIME
CONSULTANT FIRST LEARNS OF SUCH INFORMATION, OR GENERIC INFORMATION OR KNOWLEDGE WHICH CONSULTANT
WOULD HAVE LEARNED IN THE COURSE OF SIMILAR SERVICES OR EMPLOYMENT ELSEWHERE N THE TRADE, SHALL NOT
BE DEEMED PART OF THE CONFIDENTIAL INFORMATION.

               (f) Any capitalized terms used and not otherwise defined herein shall have the meanings, if
any, ascribed to them in the Consulting Agreement.

     2. Confidential Treatment. Consultant hereby agrees, during the term of his consulting
arrangement with Company and at all times thereafter, to hold in confidence and not to directly or
indirectly reveal, report, publish, disclose or transfer any of the Confidential Information to any
person or entity, or utilize any of the Confidential Information for any purpose, except in the
course of Consultant’s services for Company, without the prior written consent of the chief
executive officer of Company. Consultant agrees that, as between Consultant and Company, Company
owns all of the Confidential Information, and Consultant hereby agrees to regard and preserve as
confidential all Confidential Information. Consultant hereby agrees not to take, retain or copy,
without the prior written consent of the chief executive officer of Company; any or all of the
Confidential information. Without limiting the foregoing, during the term hereof and after
termination of Consultant’s employment wit Company, Consultant shall riot use, build,
reverse-engineer, decompile, modify for use or disassemble of the Technology.

     3. Ownership. The Technology including without limitations any and all Creations shall
be the sole and exclusive property of the Company. At any time upon the request of the Company,
Consultant shall: (i) assign, without charge to the Company, all his rights, title, and interests
in any of the Creations of the Company; (ii) execute, acknowledge, and deliver any and all
instruments

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necessary to confirm the Company’s complete ownership and creations; and (iii) perform all other
reasonable acts which may be necessary to perfect and to protect the Company’s ownership rights in
the Creations. Consultant hereby assigns to the Company a11 of his right, title and interest in and
to the Creations. Consultant shall disclose promptly and only to the Company, and shall make an
adequate record of, any and all Creations conceived or developed by Consultant (either alone or
jointly with others) during the term of this Agreement and within one year thereafter, whether or
not the property of the Company.

     4. Return of Materials and Copies. All notes, data, reference materials,
sketches, drawings, memoranda, documentation and records in any way incorporating or reflecting any
of the Confidential Information and all proprietary rights therein, including copyrights, shall
belong exclusively to Company, and Consultant hereby agrees to turn over promptly a11 copies of
such materials in Consultant’s control to Company upon Company’s request or upon termination of
Consultant’s employment by Company.

     5. Non-Competition and Non-Solicitation. During the Company’s employment of
Consultant and for a period of two (2) years following the term of the Consulting Agreement,
Consultant shall not assist, become employed by or engage in any consulting or other services for
any person or entity that is engaged in any business or other activity in competition with the
Company, nor solicit or entice any of the Company’s employees to do any of the foregoing. During
the Company’s employment of Consultant and for a period of two (2) years following the term of the
Consulting Agreement, Consultant shall not set up or take preliminary steps to set up or engage in
any business enterprise that would be in competition with the Company and Consultant shall
disclose to the Company, any and all competitive plans that Consultant may have, without regard to
Consultant’s intent to act or not act on such plans.

     6. Fiduciary Obligations. Nothing in this Agreement is intended to limit
Consultant’s obligations to Company in any capacity, and Consultant shall be bound by all fiduciary
and other obligations to Company which may arise by reason of Consultant’s employment, capacity or
other duties to the Company.

     7. Injunctive Relief. Due to the unique nature of the Confidential
Information; Consultant understands and hereby agrees that Company will suffer irreparable harm in
the event that Consultant fails to comply with any of Consultant’s obligations under Section 2 or 3
above and that monetary damages will be inadequate to compensate Company for such breach.
Accordingly, Consultant hereby agrees that Company will be entitled, in addition to any other
remedies available to it at law or in equity, to injunctive relief to enforce the terms of Sections
2 and 3 above.

     8. Amendments; Consents. No amendment, modification, supplement, termination
or waiver of any provision in this Agreement, and no consent to any departure therefrom, shall be
effective unless in writing and signed by both Consultant and Company and then only in the specific
instance and for the specific purpose given.

     9. Notice. Any notices required or permit deemed received when personally
delivered or, if earlier, ten (10) days after mailing by registered or certified United States
mail; postage prepaid, and with return receipt requested. Notice to the Company is valid if sent to
the Company’s principal place of business and notice to Consultant is valid if sent to Consultant
at Consultant’s address as it appears in the Company’s records.

     10. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all such counterparts when taken together shall be
deemed to be one and the same instrument.

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     11. Binding Effect; Assignment. This Agreement shall be binding upon and inure
to the benefit of Consultant and Company and their respective permitted successors and assigns.
This Agreement, including the rights and obligations hereunder, shall not be assigned or
transferred by Consultant without the prior written consent of Company.

     12. Integration; Construction. This Agreement (together with the Consulting
Agreement) shall comprise the complete and integrated agreement of the Company and Consultant and
shall supersede all prior agreements, written or oral, on the subject matter hereof. Neither party
hereto shall have a provision construed against it by reason of such party having drafted the
same.

     13. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California.

     14. Severability of Provisions. Any provision in this Agreement that is held to be
inoperative, unenforceable or invalid in any jurisdiction shall be, as to that jurisdiction only,
inoperative, unenforceable or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability or validity of those provisions in any other
jurisdiction, and to this end the provisions of this Agreement shall be severable.

     15. Headings. Headings of this Agreement are included for convenience only and shall
not be considered a part of this Agreement for any other purpose.

     16. Attorneys’ Fees. In the event of any litigation or other dispute arising
as a result of or by reason of this Agreement, the prevailing party in any such litigation or other
dispute shall be entitled to, in addition to any other damages assessed, its reasonable attorneys’
fees, and all other costs and expenses incurred in connection with settling or resolving such
dispute. The attorneys’ fees which the prevailing party is entitled to recover shall include fees
for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until
the final judgment is satisfied in full. In addition to the foregoing award of attorneys’ fees to
the prevailing party, the prevailing party in any lawsuit on this Agreement shall be entitled to
its reasonable attorneys’ fees incurred in any past judgment proceedings to collect or enforce the
judgment. This attorneys’ fees provision is separate and several and shall survive the merger of
this Agreement into any judgment.

     17. Waiver; Rights and Remedies. Neither Consultant’s nor Company’s failure to
exercise any right under this Agreement shall constitute a waiver of any other term or condition of
this Agreement with respect to any other preceding, concurrent or subsequent breach, nor shall it
constitute a waiver by the Company or Consultant or its rights at any time thereafter to require
exact and strict compliance with any oil the terms of this Agreement. The rights and remedies set
forth in’ his Agreement shall be in addition to any other rights or remedies which may be granted
by law.

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     IN WITNESS WHEREOF, the parties hereto have executed or caused their respective duly
authorized officer to execute this Agreement as of the date first set forth above.

	 	 	 	 	 
	 	SAVE THE WORLD AIR, INC.

 
 	 
	 	By  	/s/ EUGENE E. EICHLER
 	 
	 	Its  	President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	CONSULTANT

 
 	 
	 	By  	/s/
JOHN B. FAWCETT 	 
	 	Name  	John
B. Fawcett 	 
	 	Address  	22146 Placeritos Bl
	 
	 	 	Newhall, CA 91521
	 
	 	 	 
	 

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ANNEX C

CONSULTANT’S COMPENSATION

Pursuant to Section 6 of the Agreement to which this Annex is attached, and into which the
provisions of this Annex are incorporated, and subject to the terms and conditions contained in the
Agreement, the Company shall pay and deliver to Consultant the following:

          (a) Equity Incentives. Subject to compliance with applicable securities laws, the
Company shall issue to Consultant Common stock awards for an aggregate of 65,000 shares of Company
common stock, as follows:

	 	 	 
	Type of shares:
	 	Common Stock.
	 
	Number of shares:
	 	65,000

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Exhibit 10.24

ADVISORY SERVICES AGREEMENT

     This Advisory Services Agreement (this “Agreement”) is made and entered into as of this
7th day of July, 2003 by and between Save the World Air, Inc., a Nevada corporation (the
“Company”) and Kevin Charles Hart , also known as “Pro Hart” (“Advisor”), with reference to the
following facts.

RECITALS

	 	A.  	The Company has certain rights to a proprietary technology (the “Technology”)
for a product known as the Zero Emissions Fuel Saving device (“ZEFS Device”) that is
intended to be used on motor vehicles to reduce pollution and improve fuel efficiency.
The Company desires to further develop the Technology and market and sell the ZEFS
Device.

	 	B.  	Advisor is a famed Australian artist and inventor of the ZEFS Device. The
Company desires to engage Advisor, and Advisor desires to serve the Company, in an
advisory capacity on and subject to the terms of this Agreement.

     THEREFORE, the Company and Advisor hereby agree as follows:

     Section 1. Scope of Services Provided.

     1.1 Advisor shall provide advice, counsel and support to the Company’s Board of Directors and
management on an as-needed basis, by telephone or in person, in matters relating to the Company’s
business, including product development, marketing and promotion, and other matters concerning the
ZEFS Device as the Company may reasonably request from time to time during the term of this
Agreement. Advisor also agrees to serve on the “Advisory Board” which shall report to the Company’s
Board of Directors.

     1.2 Advisor agrees to appear at not less than two events per year during the term of this
Agreement subject to Advisor’s prior commitments, schedule and availability, and at such other
times as may be mutually agreed, to assist and support the Company in promoting the ZEFS Device.

     Section 2. Compensation; Expenses.

     2.1 As soon as practicable following the parties execution of this Agreement, the Company
shall issue to Advisor 50,000 shares of the Company’s common stock, par value $.001 per share (the
“Stock”). The Stock shall be deemed to have a value of $.001 per share. Advisor shall execute and
deliver to the Company a subscription agreement substantially in the form attached hereto in
Annex A, the provisions of which are incorporated herein by this reference.

     2.2 The Company shall reimburse Advisor for all reasonable and necessary out-of-pocket
expenses incurred by Advisor in performing the services requested by the Company hereunder,
including without limitation travel, meals, accommodations and phone charges, subject to Advisor’s
presentation to the Company of receipts for such charges, in accordance with the Company’s
practices and policies as adopted or approved from time to time.

     Section 3. Non-Disclosure Obligations.

     Advisor acknowledges that the Technology is proprietary and agrees to execute a standard
confidentiality agreement substantially in the form attached hereto in Annex B, the
provisions of which are incorporated herein by this reference.

 

 

     Section 4. Use of Advisor’s Name and Likeness.

     4.1 The Company will not use Advisor’s name or likeness in any advertising or
marketing/promotional material without Advisor’s prior written approval or consent, to be given or
refused in the Adviser’s absolute discretion.. Except as may be expressly agreed to by the parties
hereto in writing, the Company shall acquire no ownership or rights in or to Advisor’s name or
likeness that by its use or incorporation in any company advertising or promotional materials other
than the right to use, duplicate and distribute such name or likeness as and to the extent to which
Advisor may have previously consented.

     4.2 The Company may identify Advisor as member of the Company’s Advisory Board and may make
such disclosures as may be necessary or advisable to comply with federal securities laws, including
without limitation disclosures in filings with the Securities and Exchange Commission or press
releases as to: (1) the terms of this Agreement; (2) the appointment of Advisor to the Company’s
Advisory Board; and (3) Advisor’s Stock ownership.

     Section 5. Miscellaneous Provisions.

     5.1 Term. The initial term of this Agreement is one year from the effective date of
this Agreement. This Agreement shall renew automatically from year to year unless terminated by
either party by giving the other not less than thirty (30) days’ prior written notice of its
election to terminate this Agreement.

     5.2 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all such counterparts when taken together shall be
deemed to be but one and the same instrument.

     5.3 Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.

     IN WITNESS WHEREOF, the parties hereto have executed or caused their respective duly
authorized officer to execute this Agreement as of the date first set forth above.

	 	 	 	 	 
	 
	ADVISOR	 	 
	 
	 	 	 	 
	 
	By:

	 	/s/ K.C. HART	 	 
	

	 	 	 	 
	

	 	Kevin Charles Hart	 	 
	 
	 	 	 	 
	 
	 
	SAVE THE WORLD AIR, INC.	 	 
	 
	 
	 	 	 	 
	By:
	 	/s/ EUGENE E. EICHLER	 	 
	

	 	 	 	 
	Name: Eugene E. Eichler	 	 
	Title: Chief Financial Officer	 	 

2

 

ANNEX A

SUBSCRIPTION AGREEMENT

SAVE THE WORLD AIR, INC.

The undersigned hereby proposes to acquire Common Stock of Save the World Air, Inc., a Nevada
corporation (the

“Company”). .

The undersigned understands that the shares of Common Stock are being offered and sold
without registration under the Securities Act of 1933, as amended (the “Act”), in reliance upon
the private placement exemption contained in Sections 4(2) and 4(6) of the Act, and Regulation. D
promulgated thereunder, and that such reliance ~s based on the undersigned’s representations set
forth below.

To induce the Company to accept this subscription and issue and deliver the Common Stock, the
undersigned agrees, warrants, and represents as follows:

1. This offer is irrevocable and subject to acceptance or rejection by the Company
in its sole discretion.

2. The undersigned is acquiring the Common Stock for investment for his or her own
account, and not with a view toward distribution thereof, and with no present
intention of dividing his or her interest with others or reselling or otherwise
disposing of all or any portion of the Common Stock. The undersigned has not
offered or sold a participation in this purchase of Common Stock, and will not
offer or sell the Common Stock or interest therein or otherwise, in violation of
the Act. The undersigned further acknowledges that he or she does not have in mind
any sale of the Common Stock currently or after the passage of a fixed or
determinable period of time or upon the occurrence or non-occurrence of any
predetermined events or consequence; and that he or she has no present or
contemplated agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for or which is likely to compel a disposition of the Common
Stock and is not aware of any circumstances presently in existence that are likely
in the future to prompt a disposition of the Common Stock.

3. The undersigned acknowledges that the shares of Common Stock have been offered
to him or her in direct communication between himself or herself and the Company or
through registered broker-dealers and not through any advertisement of any kind.

4. The undersigned acknowledges that he or she has read all the materials included
in the Executive Summary and Exhibits thereto and has had access to all of the
Company’s filings with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, that the Company has not timely filed its annual
report of Form 10-KSB nor does it have current audited financial statements, that
the offer and sale of Common Stock to the undersigned were based on the
representations and warranties of the undersigned in this Subscription Agreement,
and acknowledges that he or she has been encouraged to seek his or her own legal
and financial counsel to assist him or her in evaluating this investment. The
undersigned acknowledges that the Company has given him or her and all of his or
her counselors access to all information relating to the Company’s business that
they or anyone of them has’ requested. The undersigned acknowledges that he or she
has sufficient knowledge, financial and business experience concerning the affairs
and conditions of the Company so that he or she can make a reasoned decision as to
this investment in the Company and is capable of evaluating the merits and risks of
this investment. Based on the foregoing, the undersigned hereby agrees to indemnify
the Company thereof and to hold each of such persons and entities, and the
officers, directors and employees thereof harmless against all liability, costs or
expenses (including reasonable attorneys’ fees) arising by reason of or in
connection with any misrepresentation or any breach of such warranties of the
undersigned, or arising as a result of the sale or distribution of the Common Stock
by the undersigned in violation of the Act, the Securities Exchange Act of 1934, as
amended, or any

 

 

other applicable law, either federal or state. This subscription and the representations and
warranties contained herein shall be binding upon the heirs, legal representatives, successors and
assigns of the undersigned.

5. The undersigned acknowledges that he or she is able to bear, and understands, the economic risks
of the proposed investment and all other risks of the Company’s business.

                         The undersigned represents that he or she is:

	 	 	 
	

	 	(a) An Accredited Investor, as that term is defined by Regulation D of the Securities and Exchange
Commission, which means any investor meeting at least one of the following conditions:

	 	 	 	 	 
	

	 	(i)
	 	Any natural person whose individual net worth (or joint net worth with that person’s spouse, if
applicable) at the time of purchase exceeds $1,000,000; or
	

	 	(ii)
	 	Any natural person who had an individual income in excess of $200,000 or joint income with that
person’s spouse in excess of 5300,000 in each of the two most recent years and who reasonably
expects an income in excess of 5200,000 or joint income with that person’s spouse in excess
of $300,000 in the current year; or
	

	 	(iii)
	 	Any other Accredited Investor as that term is defined in Regulation D as adopted by the Securities
and Exchange Commission.

	 	 	 
	6.

	 	(a) The undersigned is aware of the restrictions of transferability of the Common
Stock and further understands and acknowledges that any certificates evidencing the
Common Stock will bear the following legends, to which such interests will be
subject:

	 	 	 
	

	 	THE SHARES EVIDE:\CED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AMENDED, OR QUALIFIED FOR SALE UNDDER ANY STATE SECURITIES LAWS (COLLECTIVELY,
“SECURITIES LA W5”) A:\D MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR
QUALIFIED FOR SALE UNDER ALL APPLICABLE SECVRITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER. ANY SUCH OFFER.
SALE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH
SECURITIES LAWS.

	 	 	 
	

	 	(b) The undersigned understands that following the purchase of the Common Stock, the Common Stock
may only be disposed of pursuant to either (i) an effective registration statement under the Act,
or (ii) an exemption from the registration requirements of the Securities Act of 1933.
	 
	

	 	(c) The Company has neither filed such a registration statement with the SEC or any state
authorities nor agreed to do so, nor contemplates doing so in the future for this offering of
Common Stock, and in the absence of such a registration statement or exemption, the undersigned may
have to hold the Common Stock indefinitely and may be unable to liquidate them in case of an
emergency.
	 
	

	 	(d) The undersigned acknowledges that the Company is not obligated and does not propose to furnish
the undersigned with information necessary to enable it to be able to make sales under Rule
144 of the Securities Act of 1933.

7.
The undersigned represents that he or she is a resident of
                         and makes the following representation:

	 	 	 
	

	 	I, THE UNDERSIGNED, REPRESENT THAT I HAVE A PRE-EXISTING PERSONAL OR BUSINESS RELATIONSHIP
WITH THE CONIPANY, ANY OFFICER, DIRECTOR OR CONTROLLING PERSON THEREOF OR HAVE, THROUGH
MYSELF OR THROUGH MY UNAFFILIATED PROFESSIONAL ADVISER, THE BUSINESS OR FINANCIAL EXPERIENCE
TO PROTECT MY INTERESTS IN CONNECTION WITH MY SUBSCRIPTION HERETO.

 

 

FURTHER, I AM PURCHASING THE COMMON STOCK OFFERED HEREBY FOR INVESTMENT AND NOT WITH A VIEW TOWARD
DISTRIBUTION THEREOF.

8. This Subscription Agreement has been delivered in, and shall be construed in accordance with the
laws of the State of California. Subject to the provisions of the paragraph immediately following,
any action in connection with this Subscription Agreement shall be brought in the appropriate state
or federal court in and for the County of Los Angeles, State of California, which shall have
exclusive jurisdiction over such action.

	 	 	 
	 	Executed as of this 
     30      

day of     July     2003

S
	 
	 
	 	/s/  K.C. Hart
	 	 
	 	Signature of Subscriber
	 
	 
	 	Kevin Hart
	 	 
	 	Print Name

*******************************************

* * * * ** * * * * * * *

The above and foregoing Subscription accepted this 7th day of      July      2003

Save the World Air, Inc. 

a Nevada corporation

	 	 	 	 
	 	By:
	 	/s/   Eugene E. Eichler
	 	

	 	 
	 
	 
	 	Its:

	 	Chief Financial Officer
	 	

	 	 

 

 

ANNEX B

Confidentiality Agreement

July 7, 2003

STRICTLY PRIVATE AND CONFIDENTIAL

BY FACSIMILE

Save the World Air, Inc.

29229 Canwood Street, Suite 206

Agoura Hills, California 91301

Attention: Eugene E. Eichler, Chief Financial Officer

Gentlemen:

In connection with the advisory services that you have asked me to provide to Save
the World Air, Inc. (the “Company”) as a member of its Advisory Board, I may be
provided and/or have access to technical and other information concerning the Company and
its proprietary technology (the “Technology”) for a product known as the Zero
Pollution-Fuel Saving Device (“ZERO Device”) that can be used on motor vehicles to reduce
pollution and improve fuel efficiency. As a condition to my being furnished such
information, I agree to treat any information concerning the Technology (including
without limitation all specifications, designs, processes, concepts, ideas, strategic
plans, product development plans, research and development, information about the
Company’s operations, finances, reports, interpretations, forecasts and records, and any
analyses, compilations, studies or other documents, whether prepared by the Company or
others, that contain or reflect such information (collectively, the “Confidential
Information") in accordance with the provisions of this letter. The term
“Confidential Information” does not include information which (a) was or
becomes generally available to the public other than as a result of a disclosure by me or
my agents or advisors, (b) was or becomes available to me on a non-confidential .basis
from a source other than the Company or its advisors provided that such source is not
bound by a confidentiality agreement with the Company, (c) was within my possession prior
to its being furnished to me by or on behalf of the Company, provided that the source of
such information was not bound by a confidentiality agreement with the Company in respect
thereof.

By this letter, I agree that the Confidential Information will be used solely for the
purposes in furtherance of my advisory services to the Company and will not be used by me
in any way detrimental to the Company. I also agree that the Confidential Information
will be kept confidential by me, my agents and employees; provided, however, that (i) any
such information may be disclosed to my agents and employees who need to know such
information for the purpose of providing the advisory services (it being understood that
such persons shall be informed by me of the confidential nature of such information and
shall be directed by me to treat such information confidentially and shall assume the
same obligations as I under this letter) and (ii) any disclosure of such information may
be made to which the Company consents in writing. I shall be responsible for any breach
of this letter by my agents or employees.

 

 

Save the World Air, Inc.

Page 2 of 2

I shall promptly redeliver to the Company all written material containing or reflecting any
information contained in the Confidential Information (whether prepared by the Company or
otherwise) if I choose not to proceed with the advisory services, and shall not retain any
copies, extracts, or other reproductions in whole or in part of such written material. All
documents, memoranda, notes, and other writings whatsoever, prepared by me or my advisors based
on the information contained in the Confidential Information shall be destroyed, and such
destruction shall be certified in writing to the Company by an authorized officer supervising
such destruction.

In the event I am required by legal process to disclose any of the Confidential Information, I
shall provide you with prompt notice of such requirement so that you may seek a protective order
or other appropriate remedy or waive compliance with the provisions of this letter. In the
event that a protective order or other remedy is obtained, I shall use all reasonable efforts to .
assure that all Confidential Information disclosed will be covered by such order or other remedy.
Whether such protective order or other remedy is obtained or we waive compliance with the
provisions of this letter, I will disclose only that portion of the Confidential Information that
I am legally required to disclose.

No failure or delay by the Company in exercising any right, power or privilege under this letter
shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. If there should arise any conflict
between the terms of this letter agreement and any other agreement concerning the advisory
services, the provisions of this letter agreement shall control. This letter shall be governed by
laws of California, U.S.A, in all respects. Any assignment of this letter by me without our prior
written consent shall be void.

I certify that no Confidential Information, or any portion thereof, will be exported to any
country in violation of the United States Export Administration Act and regulations thereunder. I
hereby further certify that I am not a resident of any of the following countries: Iraq, Iran,
Libya, North Korea, Syria, Laos, Mongolian People’s Republic, Cuba, Cambodia, North Korea,
Nicaragua, or the People’s Republic of China.

* * *

Very truly yours,

/s/ K. C. Hart

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