Document:

hpev_ex1043.htm

EXHIBIT 10.43*

 

 

March 31st, 2012

Mr. Ted Banzhaf

2502 Woodward Blvd.

Tulsa, OK 74114

 

	

Re:

	
Employment

 

Dear Mr. Banzhaf:

 

I am pleased to offer you a position with Z3 Enterprises, Inc., a Nevada corporation to be renamed HPEV, Inc. (the "Company"), as its President, with a target start date of April 2, 2012. In this position you will be expected to devote your full business time, attention and energies to the performance of your duties with the Company. 1

 

You will receive salary as follows:

	
•

	
Prior to raising $3.5 million investment for the Company, your compensation will be $1 per month.

 

	
•

	
Subsequent to raising $3.5 million as evidenced by an executed term sheet with a deposit committed, your compensation will be $20,000 per month.

 

Your salary will be paid monthly and will be paid on the last day business day in each month. The first and last payment by the Company to you will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period.

You will be expected work for the Company during normal business hours except to the extent your duties require you to be traveling, and as your role and responsibilities may additionally demand. The Company will reimburse you for your relocation costs of up to $10,000 for one move within six (6) months.

 

As a Company employee, you will be eligible for paid vacation totaling 15 work days per year, sick leave and holiday time off. HPEV is a start up company there are no employee benefit plans in place at this time. The addition of employee benefits beyond base salary and bonuses will be implemented for all officers as soon as the financial condition permit, and as an officer, you will have the opportunity to participate in the planning and timing for the additional benefits.

The Company will also reimburse you for all reasonable, ordinary and necessary out­ of-pocket business expenses incurred by you in conjunction with your services to the Company consistent with the Company's standard reimbursement policies, including for phone, computer and basic travel expense related to Company business. All reimbursement will be made against original receipts and otherwise in accordance with the Company's general expense reimbursement policies and procedures. The Company will reimburse you for your reasonable attorneys' fees and costs incurred by you in connection with the drafting, negotiation, execution and delivery of this Agreement.

____________________________

The Company understands that your full time commitment does not preclude you from handling your transition responsibilities over the next thirty (30) days in connection with your disengagement from Applied Bio Fuels Corporation, of which you are currently CEO.

 

  

Page 1 of 8

  

 

Confidential

 

You should be aware that your employment with the Company constitutes "at-will" employment. This means that your employment relationship with the Company may be terminated at any time, with or without cause. However, subject to the terms of your standard Employment Agreement for senior executive employees, upon a separation from service by termination without cause, the Company will pay to you, in addition to all other amounts to which you are otherwise entitled, a severance benefit equal to one (1) month's salary for each three (3) months of employment, which shall not be less than six (6) nor more than twelve (12) months' salary in effect at the time of termination. You understand and agree that neither your job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of the terms of your employment with the Company.

Notwithstanding the foregoing, in the event of either a Termination Without Cause within the first year of employment you will received compensation for six months of salary at that time.

This offer is contingent upon verification of your identity and employment eligibility in accordance with the laws of the United States of America. You will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States on the first day of your employment.

You agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the

term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company.2

As a Company employee, you will be expected to abide by all federal or state laws and in accordance of normal industry practices. You also agree to maintain the confidentiality of all confidential and proprietary information of the Company and agree, as a condition of your employment, to enter into a standard non-disclosure, non-compete, and non-solicit provisions and be incorporated herein by reference, and the performance of which will be a condition to your employment.

You agree that any dispute or claim relating to or arising out of our employment relationship shall be fully and finally resolved by binding arbitration conducted by the American Arbitration Association in Pasco County Florida. However, we agree that this arbitration provision shall not apply to disputes or claims relating to or arising out of the misuse or misappropriation of the Company's trade secrets or proprietary information.

___________________________

	
2 

	
Handling of your transition responsibilities over the next thirty (30) days in connection with your disengagement from Applied BioFuels Corporation, of which you are currently CEO, are expressly excluded

  

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Confidential

 

This letter and the documents incorporated herein by reference represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company and supersede in their entirety all prior agreements and understandings concerning your employment relationship with the Company, whether written or oral.

In accepting this offer, you represent and warrant to us that (a) you are not a party to any employment agreement or other contract or arrangement which prohibits your full-time employment with the Company, (b) you do not know of any conflict which would restrict your employment with the Company, and (c) you do not have and will not bring with you to your employment with the Company any document, record or other confidential information belonging to a former employer. Each of these representations and warranties is a material inducement to the making of this offer and a condition to your continued employment, and you agree that a termination of your employment by the Company in the event of a breach of any of them would be with cause and not subject to an opportunity to cure.

The terms of this letter may only be amended, canceled or discharged in writing signed by you and an authorized director or officer of the Company and with Board Directors approval. As this letter relates to employment to be performed for a company with headquarters in the State of Florida, this letter shall be governed by the internal substantive laws, but not the choice oflaw rules, of the State of Florida. Inthe event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this letter shall continue in full force and effect without such provision.

You have inquired about a Board of Directors position. Inthe short term that is not feasible as the two founders of the patents and myself as a founder in the financial phase will be on the Board. A fourth member is currently the only member of the Board until the re­ organization and the name change takes place and will continue on the Board. The fifth member of the Board will have to be independent based on SEC rules for a public company. At some point when we can justify it, we will go to seven Board members and you will certainly be eligible at time. Also at my somewhat advanced age, I may elect to step aside which would provide an opening for you.

This current offer has been modified in line with compensation that is reasonable for a company our size and taking into consideration compensation for other officers.

 

  

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Confidential

 

[Signature Page Follows]

 

 

 

 

  

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Confidential

To indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below and return it to me. A duplicate original is enclosed for your records.

 

	 	
Sincerely,

 

Z3 Enterprises, Inc., to be named HPEV, Inc.

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Quentin Ponder, President and CEO	 
	 	 	On behalf of the Board of Directors	 
	 	 	 	 
	ACCEPTED and AGREED TO this	 	 	 
	day of                                     , 2012	 	 	 
	_________________________________	 	 	 
	Ted Banzhaf	 	 	 

 

  

Page 5 of 8

  

 

Confidential

 

Incentive Compensation Plan for President

 

Z3 Enterprises, Inc.

(to be renamed HPEV, Inc.)

The Board of Directors (the "Board") of Z3 Enterprises, Inc., a Nevada corporation to be renamed HPEV, Inc. (the "Company"), has authorized the Company to pay bonuses to Ted Banzhaf, as President of the Company, as set forth and subject to the terms and conditions set forth herein (in this "Plan").

Quarterly Bonuses

Following completion of the raising of $3.5 million capital and committed for deposit, Ted Banzhaf, as President of the Company, shall be eligible for discretionary quarterly cash and equity bonuses ("Quarterly Bonuses"), based on his individual performance and the Company's corporate performance in such quarter, as determined by the Board and as set forth below. In the event of a Termination Without Cause (defined below) before the end of any such quarter, the President's bonus for such quarter will be paid pro rata based on the period of time he was employed by the Company in such quarter.

Each Quarterly Bonus target shall be $25,000 in cash plus options to purchase up to 25,000 shares of the Company's common stock ("Quarterly Bonus Options"), to be measured pro rata based on the period of time he was employed by and earned salary from the Company during such quarter, with the actual amount of such bonus to be awarded at the sole discretion of the Board . The Quarterly Bonus opportunity for the President will be based on evaluation of his individual performance in the applicable quarter and the Company's corporate performance in such quarter, as determined in the sole discretion of the Board.

Each Quarterly Bonus Options will be granted by the Board on the last trading day of the quarter in which such Quarterly Bonus is earned, at an exercise price equal to the closing price of the Company's common stock on the OTCBB (or a national securities exchange, if applicable) on such day, being the grant date. The shares subject to the Quarterly Bonus Options shall be fully vested and exercisable and shall be subject otherwise to the terms, definitions and provisions of the Company's stock incentive compensation plan ("Stock Plan") and form of stock option agreement for employees. The Stock Plan and form of option agreement to be adopted and approved by the Board, and the shares subject to the Stock Plan to be registered by the Company, prior to the end of the first quarter following completion of the $3.5 million capital raise as mentioned above. Shares subject to the Stock Plan will be subject to customary adjustments in the event of stock splits and the like, in accordance with the terms of such plan.

 

  

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Confidential

Share Performance Bonuses

Mr. Banzhaf, as President of the Company, shall be eligible for up to five (5) bonuses based on the performance of the Company's common stock price ("Share Performance Bonuses"). Each Share Performance Bonus shall be paid in the form of an option to purchase the Company's common stock (each a "Share Performance Bonus Option") and be based upon the trading price milestones for the Company's common stock, as follows:

 

	
VWAP Target

	 	
Number of Bonus Shares

	$2.00	 	
1,000,000

	$3.00	 	1,000,000
	$5.00	 	1,000,000
	$7.50	 	1,000,000
	$10.00	 	1,000,000

 

As used above:

 

	
●

	
"VWAP Target" means the volume weighted average price of the Company's common stock (60 minute periods) on the OTCBB (or a national securities exchange, if applicable) for 20 consecutive trading days while Mr. Banzhaf is employed by the Company and serving as President, or within one (1) year after a Termination Without Cause.

	
●

	
"Number of Bonus Shares" means the number of shares of Common stock of the Company subject in each case to a Share Performance Bonus Option to be granted to Mr. Banzhaf.

Each Share Performance Bonus Option will be granted by the Board within three (3) business days after the applicable VWAP Target is achieved, at an exercise price equal to the closing price of the Company's common stock on the OTCBB (or a national securities exchange, if applicable) on the grant date, shall be fully vested and exercisable, and shall be subject otherwise to the terms, definitions and provisions of the Stock Plan.

Notwithstanding the foregoing, all Share Performance Bonus Options will be deemed earned in the event of and immediately prior to the closing of a Change of Control Transaction which closes while Mr. Banzhaf is employed by the Company and serving as President or within one (1) year after a Termination Without Cause.

Miscellaneous

Nothing contained in this Plan is intended to nor shall it limit the Board 's authority to award in the exercise of its sole discretion additional bonuses or other compensation for Mr. Banzhaf that is not described herein. Nothing contained in this Plan is intended to nor shall it limit the rights of the Company with respect to the employment of Mr. Banzhaf or any other employee of the Company or the termination thereof. This Plan shall not apply to any subsequent president of the Company.

 

  

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Confidential

 

As used here in:

"Change of Control Transaction" means, whether in one or a series of transactions, (a) any merger, consolidation, reorganization, joint venture or other business combination pursuant to which some or all of the assets or operations of the Company are combined with that of a purchaser, (b) the acquisition directly or indirectly by a purchaser by way of a tender or exchange offer, negotiated purchase or other arrangement or any means of acquiring all or any substantial portion of the outstanding capital stock of the Company or one or more of its subsidiaries, other than in the ordinary course of business, (c) the acquisition by a purchaser, through public or private purchases or otherwise of all or a substantial portion of the assets, properties, or businesses of the Company by way of a negotiated purchase, lease, license (other than in the ordinary course of business), exchange, joint venture, purchase of newly issued securities or other means, except in each case for any reorganization solely with affiliates of the Company.

The State of Florida is an employment at will State and as such "Termination Without Cause" means termination of Mr. Banzhaf s employment as President (a) by the Board for any reason, other than as a Death Termination or Disability Termination (as such terms are defined in his Employment Agreement).

 

Page 8 of 8hpev_ex1044.htm

EXHIBIT 10.44

  

PLACEMENT AGENT AND ADVISORY

SERVICES AGREEMENT

This Placement Agent and Advisory Services Agreement (this "Agreement") is made as of May 28, 2013 (the “Effective Date”), by and between HPEV, Inc., a Nevada corporation (together with its subsidiaries, the "Company"), and Monarch Bay Securities, LLC, a California limited liability company ("MBS"). MBS and the Company agree as follows:

 

	
1.  

	
Engagement of MBS: The Company hereby engages MBS, and MBS hereby accepts such engagement, to act as the Company's placement agent with respect to finding investors (the “Investors”) for one or more offerings of the Company’s securities (including placements of the Company’s debt) of no less than $750,000 and up to $4,000,000 in a transaction or transactions exempt from registration under the Securities Act of 1933, as amended, and in compliance with the applicable laws and regulations of any jurisdiction in which securities are sold under this Agreement (each, a “Financing”); and

 

The Company acknowledges and agrees that MBS's obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by MBS to purchase any securities and does not ensure the successful placement of any securities or any portion thereof or the success of MBS with respect to securing any other Financing on behalf of the Company. MBS will act solely as a broker with respect to identifying and negotiating with potential investors in a Financing. MBS will not act as an underwriter in any Financing.

 

	
2.  

	
MBS's Compensation: The Company hereby agrees to pay MBS fees in such amount and upon such terms and conditions contained herein upon the successful completion of a Financing as follows:

 

Retainer: The Company shall pay to MBS a non-refundable warrant retainer to purchase 400,000 shares of the Company’s common stock with a strike price equal to one hundred and ten percent (110%) of the closing market price on the Effective Date (the “Retainer Warrants”). One half of the Retainer Warrants shall vests upon the Effective Date and one half of the Retainer Warrants shall vest upon the closing of a Financing of at least $750,000.

 

Success Fees: The Company will pay MBS a Success Fee, as described below, when the Company closes on a Financing during the Term (as hereinafter defined) of this Agreement or during a two-year period thereafter.

 

  

1

  

Computation of Success Fees:

 

	
(i)

	
Cash Fee-MBS Sourced- For each Financing derived from a MBS Sourced Investor, the cash portion of the Success Fee will be ten percent (10%) of the gross proceeds raised in the Financing (including, without limitation, upon exercise of any warrants issued in the Financing) from MBS Sourced investors that closes on or before June 28, 2013 or eight percent (8%) of the gross proceeds raised in the Financing (including, without limitation, upon exercise of any warrants issued in the Financing) from MBS Sourced investors that closes after June 28, 2013.

 

	
(ii)

	
Warrant Fee. For each Financing, the warrant portion of the Success Fee will be equal to twelve percent (12%) of the equity issuance in conjunction with each Financing, at the corresponding price per share of such Financing that closes on or before June 28, 2013, or eight percent (8%) of the equity issuance in conjunction with each Financing, at the corresponding price per share of such Financing that closes after June 28, 2013.

 

The Company agrees to provide to MBS in writing a list of Company Referrals within two days of the Effective Date of this Agreement and from time to time thereafter. The list of Company Referrals will be incorporated into this Agreement as Exhibit B and there shall be no Success Fees paid to MBS from Company Referrals.

Payment of Success Fees:

 

	
(i)

	
Cash Fee: The cash portion of the Success Fee will be due and payable upon the closing of each Financing and will be payable directly to MBS from the escrow established for such closing or in such other manner as may be acceptable to MBS. Immediately prior to closing of a Financing, the Company will sign a payment authorization letter, in a form to be prepared at the sole discretion of MBS, irrevocably instructing the Financing source or Escrow Agent to deduct the Success Fees due to MBS from the Financing and remit those Success Fees directly to MBS.

	
(ii)

	
Warrants: The warrant portion of the Success Fee (“Warrants”) will be due and payable upon the closing of each Financing and issued to MBS in conjunction with issuance of other equity securities pursuant to the Financing. The Warrants and the Retainer Warrants will have a five (5) year term (or such longer term as is provided in any warrants issued in the Financing) and will provide for cashless exercise (even if the Investors do not have such a right). The shares underlying Warrants and the Retainer Warrants will be included in the first registration statement filed by the Company covering the securities issued in the Financing (or securities issuable upon conversion or exercise thereof). The Warrants and the Retainer Warrants will be transferable within MBS’s organization, at MBS’s discretion. The Warrants and the Retainer Warrants will contain such other terms and conditions no less favorable to MBS than the term and conditions of any warrants issued to the Investors in the Financing.

 

  

2

  

 

	
3.  

	
Certain Matters Relating to MBS’s Duties:

 

	
(a)

	
MBS shall (i) assist the Company in the preparation of information documents to be shared with potential Investors (ii) identify and screen potential Investors, and

(i) perform other related duties.

 

	
(b)

	
MBS shall perform its duties under this Agreement in a manner consistent with the instructions of the Company. Such performance shall include the delivery of information to potential interested parties, conducting due diligence, and leading discussions with potential Investors.

	
(c)

	
MBS shall not engage in any form of general solicitation or advertising in performing its duties under this Agreement. This prohibition includes, but is not limited to, any mass mailing, any advertisement, article or notice published in any magazine, newspaper or newsletter and any seminar or meeting where the attendees have been invited by any mass mailing, general solicitation or advertising.

	
(d)

	
MBS is and will hereafter act as an independent contractor and not as an employee of the Company and nothing in this Agreement shall be interpreted or construed to create any employment, partnership, joint venture, or other relationship between MBS and the Company. MBS will not hold itself out as having, and will not state to any person that MBS has, any relationship with the Company other than as an independent contractor. MBS shall have no right or power to find or create any liability or obligation for or in the name of the Company or to sign any documents on behalf of the Company.

	
4.

	
Certain Matters Relating to Company’s Dutie s:

 

	
(a)

	
The Company shall promptly provide MBS with all relevant information about the Company (to the extent available to the Company in the case of parties other than the Company) that shall be reasonably requested or required by MBS, which information shall be complete and accurate in all material respects at the time furnished.

	
(b)

	
The Company recognizes that in order for MBS to perform properly its obligations in a professional manner, it is necessary that MBS be informed of and, to the extent practicable, participate in meetings and discussions between the Company and any third party, including, without limitation, any prospective purchaser of the Company’s securities, relating to the matters covered by the terms of MBS's engagement.

 

	
(c)

	
The Company agrees that any report or opinion, oral or written, delivered to it by MBS is prepared solely for its confidential use and shall not be reproduced, summarized, or referred to in any public document or given or otherwise divulged to any other person without MBS's prior written consent, except as may be required by applicable law or regulation.

	
(d)

	
The Company represents and warrants that: (i) it has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder; (ii) this Agreement has been duly authorized and executed by and constitutes a valid and binding agreement of the Company enforceable in accordance with its terms; and (iii) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not conflict with or result in a breach of the Company's certificate of incorporation or by- laws. Further, this Agreement and the transactions contemplated herein shall not conflict with or result in the breach of any agreement to which the Company is a party at the time the transactions contemplated herein are consummated.

  

3

  

 

	
5.

	
Term; Termination of Agreement. The initial term of this Agreement shall be from the Effective Date through the first anniversary thereof (the “Initial Term”). After the Initial Term, the term of this Agreement will automatically be extended for additional successive one-month periods unless either party provides written notice to the other party of its intent not to so extend the term at least 30 days before the expiration of the then current term. The Initial Term and any extensions shall be defined as the “Term”. Either party may terminate this Agreement prior to its expiration by notifying the other party in writing upon a material breach by that other party, unless such breach is curable and is in fact cured within fifteen (15) days after such notice. Notwithstanding the foregoing, all provisions of this Agreement (including Exhibits A and B hereto) other than Sections 1, 3 and 4 (a) and (b) shall survive the termination or expiration of this Agreement. MBS shall be entitled to compensation under Section 2 (and payment for expenses under Section 12) based on the completion of a Financing prior to the termination of this Agreement, or in the event of the termination of this Agreement during the period two years following termination so long as any Investors (or any affiliate of any such person or entity) were introduced by MBS to the Company. MBS will provide to the Company within ten business days after the expiration or termination of this Agreement a list of all persons or entities introduced by MBS to the Company pursuant to this Agreement (the “Introduction List”). Within five business days following the delivery of the Introduction List to the Company, the Company will provide MBS with written notice of any objections to the inclusion of any person or entity in the Introduction List and state the basis for each objection in reasonable detail. The inclusion of a person or entity in the Introduction List shall be deemed conclusive in making a later determination as to whether a Success Fee is payable hereunder, unless the Company shall have made a timely and proper objection. The parties will cooperate to resolve the status of any person or entity as to which the Company shall have made a timely and proper objection.

Except as otherwise specifically provided for herein, the Company shall have no liability to MBS should the Company terminate this Agreement prior to the completion of a Financing.

 

	
6.

	
Indemnification. The indemnification provisions set forth in Exhibit A hereto are incorporated by reference and are a part of this Agreement.

 

  

4

  

 

	
7.

	
Notices. Any notice, consent, authorization or other communication to be given hereunder shall be in writing and shall be deemed duly given and received when delivered personally, when transmitted by fax during the normal business hours of the party receiving such notice so long a copy of that notice is also send by certified mail, return receipt requested at the time it is transmitted by fax, five business days after being mailed by certified mail, return receipt requested or one business day after being sent by a nationally recognized overnight delivery service, charges and postage prepaid, properly addressed to the party to receive such notice, at the following address or fax number for such party (or at such other address or fax number as shall hereafter be specified by such party by like notice):

 

	
  

	
(a)

	
If to the Company, to:

 

Timothy Hassett 

Chief Executive Officer

HPEV, Inc.

27420 Breakers Drive

Wesley Chapel, FL 33544

Telephone Number: (707) 479-6114

Fax Number:

E-mail: tim@hpevinc.com

 

If to MBS, to:

  

Keith Moore, Principal

Monarch Bay Securities, LLC

5000 Birch Street, Suite 4800

Newport Beach, California 92660

Telephone Number:(949) 373-7281

Fax Number: (815) 301-8099

E-mail: keith@mbsecurities.com

 

	
8.

	
Company to Control Transactions. The terms and conditions under which the Company would enter into a Financing shall be at the sole discretion of the Company. Nothing in this Agreement shall obligate the Company to actually consummate a Financing. The Company may terminate any negotiations or discussions at any time and reserves the right not to proceed with a Financing.

	
9.

	
Confidentiality of Company Information. MBS, and its officers, directors, employees and agents shall maintain in strict confidence and not copy, disclose or transfer to any other party (1) all confidential business and financial information regarding the Company and its affiliates, including without limitation, projections, business plans, marketing plans, product development plans, pricing, costs, customer, vendor and supplier lists and identification, channels of distribution, and terms of identification of proposed or actual contracts and (2) all confidential technology of the Company. In furtherance of the foregoing, MBS agrees that it shall not transfer, transmit, distribute, download or communicate, in any electronic, digitized or other form or media, any of the confidential technology of the Company. The foregoing is not intended to preclude MBS from utilizing, subject to the terms and conditions of this Agreement, the Financing or Offering Memorandum and/or other documents prepared or approved by the Company.

All communications regarding any possible transactions, requests for due diligence or other information, requests for facility tours, product demonstrations or management meetings, will be submitted or directed to the Company, and MBS shall not contact any employees, customers, suppliers or contractors of the Company or its affiliates without express permission. Nothing in this Agreement shall constitute a grant of authority to MBS or any representatives thereof to remove examine or copy any particular document or types of information regarding the Company, and the Company shall retain control over the particular documents or items to be provided, examined or copied. If a Financing is not consummated, or if at any time the Company so requests, MBS and its representatives will return to the Company all copies of information regarding the Company in their possession.

The provisions of this Section shall survive any termination of this Agreement.

 

  

5

  

	
10.

	
Press Releases, Etc. The Company shall control all press releases or announcements to the public, the media or the industry regarding any Financing or business relationship involving the Company or its affiliates. Except for communication to Investors in furtherance of this Agreement, MBS will not disclose the fact that discussions or negotiations are taking place concerning a possible Financing involving the Company, or the status or terms and conditions thereof.

	
11.

	
Due Diligence: Neither the Company, nor any of its directors, officers or stockholders, should, in any way rely on MBS to perform any due diligence with respect to the Company. It is expressly understood and agreed that the Investors will conduct their own due diligence on the Company and the opportunity.

	
12.

	
Expenses, Etc. . In the event a Financing closes on or before June 28, 2013 the Company will pay to MBS a non-accountable expense fee equal to two percent (2%) of gross proceeds raised in the Financing (the “Non-Accountable Fee”), which will be used to pay MBS’s travel and other expenses. The Non-Accountable Fee will be paid in the same time and manner as the Success Fee. In the event a Financing closes after June 28, 2013, the Company will reimburse MBS for all pre-approved (in writing) travel and other expenses. Such expenses shall be reimbursed within thirty (30) days of submission of MBS’s invoice with appropriate support to the Company. The Company will pay all other costs and expenses incident to the issuance, offer, sale and delivery of each Financing, including but are not limited to state “Blue Sky” fees, legal fees, printing costs, travel costs, mailing, couriers, and personal background checks.

	
13.

	
Compliance with Laws. MBS represents and warrants that it shall conduct itself in compliance with applicable federal and state laws. MBS represents that it is not a party to any other Agreement, which would conflict with or interfere with the terms and conditions of this Agreement.

	
14.

	
Assignment Permissable. MBS reserves the right to assign a portion of this Agreement to one or more sub-agents with respect to any Financing, subject to the prior written consent of the Company. Any approved sub-agent shall be paid a portion of Success Fees as may be determined by MBS. The Company does acknowledge that MBS may pay other consultants or agents in connection with the Financing(s).

	
15.

	
Amendments. Neither party may amend this Agreement or rescind any of its existing provisions without the prior written consent of the other party.

 

  

6

  

	
16.

	
Governing Law; Dispute Resolution. This Agreement shall be deemed to have been made in the State of California and shall be construed, and the rights and liabilities determined, in accordance with the law of the State of California, without regard to the conflicts of laws rules of such jurisdiction. Any controversy or claim relating to or arising from this Agreement (an "Arbitrable Dispute") shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") as such rules may be modified herein or as otherwise agreed by the parties in controversy. The forum for arbitration shall be Orange County, California. Following thirty (30) days’ notice by any party of intention to invoke arbitration, any Arbitrable Dispute arising under this Agreement and not mutually resolved within such thirty (30) day period shall be determined by a single arbitrator upon which the parties agree.

 

	
17.

	
Waiver. Neither MBS’s nor the Company’s failure to insist at any time upon strict compliance with this Agreement or any of its terms nor any continued course of such conduct on their part shall constitute or be considered a waiver by MBS or the Company of any of their respective rights or privileges under this Agreement.

	
18.

	
Severability. If any provision herein is or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect.

	
19.

	
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and will become effective and binding upon the parties at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall constitute one Agreement binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the same counterpart. Each of the parties hereto shall sign a sufficient number of counterparts so that each party will receive a fully executed original of this Agreement.

 

  

7

  

 

	
20.

	
Entire Agreement. This Agreement (together with Exhibits A and B hereto) constitutes the entire agreement between the Company and MBS. No other agreements, covenants, representations or warranties, express or implied, oral or written, have been made by any party hereto to any other party concerning the subject matter hereof. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants and warranties concerning the subject matter hereof are merged herein and shall be of no further force or effect.

 

	 	MONARCH BAY SECURITIES, LLC (the “MBS”)	 
	 	 	 	 
	
 

	
By: 

	/s/ Keith Moore 	 
	 	Name:	Keith Moore	 
	 	Title:	Principal	 
	 	 	 	 
	 	HPEV, INC. (the “Company”)	 
	 	 	 	 
	 	By: 		 
	 	Name:	Timothy Hassett	 
	 	Title:	Chief Executive Officer	 

 

  

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EXHIBIT A

Indemnification

The Company agrees that it shall indemnify and hold harmless, MBS, its members, managers, officers, employees, agents, affiliates and controlling persons within the meaning of Section 20 of the Securities Exchange Act of 1934 and Section 15 of the Securities Act of 1933, each as amended (any and all of whom are referred to as an "Indemnified Party"), from and against any and all losses, claims, damages, liabilities, or expenses, and all actions in respect thereof (including, but not limited to, all legal or other expenses reasonably incurred by an Indemnified Party in connection with the investigation, preparation, defense or settlement of any claim, action or proceeding, whether or not resulting in any liability), incurred by an Indemnified Party with respect to, caused by, or otherwise arising out of any transaction contemplated by this Agreement or MBS's performing the services contemplated hereunder; provided, however, the Company will not be liable to the extent, and only to the extent, that any loss, claim, damage, liability or expense is finally judicially determined to have resulted primarily from MBS's gross negligence or bad faith in performing such services.

If the indemnification provided for herein is conclusively determined (by an entry of final judgment by a court of competent jurisdiction and the expiration of the time or denial of the right to appeal) to be unavailable or insufficient to hold any Indemnified Party harmless in respect to any losses, claims, damages, liabilities or expenses referred to herein, then the Company shall contribute to the amounts paid or payable by such Indemnified Party in such proportion as is appropriate and equitable under all circumstances taking into account the relative benefits received by the Company on the one hand and MBS on the other, from the transaction or proposed transaction under the Agreement or, if allocation on that basis is not permitted under applicable law, in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and MBS on the other, but also the relative fault of the Company and MBS; provided, however, in no event shall the aggregate contribution of MBS and/or any Indemnified Party be in excess of the net compensation actually received by MBS and/or such Indemnified Party pursuant to this Agreement.

The Company shall not settle or compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, claim, suit or proceeding in which any Indemnified Party is or could be a party and as to which indemnification or contribution could have been sought by such Indemnified Party hereunder (whether or not such Indemnified Party is a party thereto), unless such consent or termination includes an express unconditional release of such Indemnified Party, reasonably satisfactory in form and substance to such Indemnified Party, from all losses, claims, damages, liabilities or expenses arising out of such action, claim, suit or proceeding.

In the event any Indemnified Party shall incur any expenses covered by this Exhibit A, the Company shall reimburse the Indemnified Party for such covered expenses within ten (10) business days of the Indemnified Party's delivery to the Company of an invoice therefor, with receipts attached. Such obligation of the Company to so advance funds may be conditioned upon the Company's receipt of a written undertaking from the Indemnified Party to repay such amounts within ten (10) business days after a final, non-appealable judicial determination that such Indemnified Party was not entitled to indemnification hereunder.

The foregoing indemnification and contribution provisions are not in lieu of, but in addition to, any rights which any Indemnified Party may have at common law hereunder or otherwise, and shall remain in full force and effect following the expiration or termination of MBS's engagement and shall be binding on any successors or assigns of the Company and successors or assigns to all or substantially all of the Company's business or assets.

 

Initials_________Initials___________

 

  

9

  

 

 

 

EXHIBIT B

Company Referrals

 

 

 

 10

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