Document:

exv10w19

 

Exhibit 10.19

NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT, NO SHARES OF THE COMPANY’S STOCK SHALL
BE ISSUED PURSUANT HERETO UNLESS THE SAVE THE WORLD AIR, INC. 2004 STOCK OPTION PLAN SHALL HAVE
FIRST BEEN APPROVED BY SHAREHOLDERS OF THE COMPANY HOLDING NOT LESS THAN A MAJORITY OF THE VOTING
POWER OF THE COMPANY.

NON-QUALIFIED STOCK OPTION AGREEMENT

This NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made and
entered into as of                     ,20 (the “Grant Date”) by and between SAVE THE WORLD AIR,
INC., a Nevada corporation (the “Company”), whose address is 5125 Lankershim Boulevard, North
Hollywood, California 91601, and                     , an individual (“Executive”), with reference to the
following facts (capitalized terms used and not otherwise defined in this Agreement shall have the
meanings set forth in the “Glossary of Terms” attached as Appendix” A” hereto, which Appendix
is hereby incorporated by this reference): .

     A. The Board of Directors of the Company (the “Board”) has heretofore adopted the Save The
World Air, Inc. 2004 Stock Option Plan (the “Plan”, a copy of which is attached hereto and
incorporated by this reference) under which the Company may grant Stock Options to certain
personnel of the Company such as Executive.

     B. Pursuant to the Plan, the Board has authorized granting to Executive, effective as of
the date of this Agreement, a Non-Qualified Stock Option under such terms and conditions as are
hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and
warranties herein set forth and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

     1. Grant of Stock Option. Pursuant to the action of the Board described above, the
Company hereby grants to Executive a Non-Qualified Stock Option to purchase, upon and subject
to the terms and conditions of the Plan, all or any part of                      (                    ) shares of Stock at an
Exercise Price of                    Dollars ($                     ) per share.

     2. Vesting. The Stock Option granted under Section 1 hereof shall become exercisable with
respect to the following percentages of the number of shares subject to such Stock Option upon the
following dates and at any time thereafter unless and until such Stock Option shall terminate under
Sections 4, 6 or 7 hereof, and subject to acceleration upon a Corporate Transaction only if and as
provided under the Plan (provided, however, that no installment of the Stock Option shall be
exercisable except with respect to a whole share, and fractional shares shall be disregarded except
that they may be accumulated):

Page 1 of 7 Pages

 

 

	 	 	 
	                    percent (                    %)

	 	First (1st) anniversary of Grant Date
	                    percent (                    %)

	 	Second (2nd) anniversary of Grant Date
	                    percent (                    %)

	 	Third (3rd) anniversary of Grant Date
	                    percent (                    %)

	 	Fourth (4th) anniversary of Grant Date

     3. Manner of Exercise and Payment. Executive shall exercise the Stock Option
granted under Section 1 hereof, if ata1l, by giving (a) written notice of such exercise to the
Committee specifying the number of shares of Stock with respect to which such Stock Option is being
exercised, together with (b) payment of the full purchase price for such shares, by wire transfer
to a Company account designated by the Committee or by unendorsed certified or cashier’s check,
equal to the number of shares to be purchased times the Exercise Price per share.

3.1 Effective Date of Exercise. The date upon which such written notice is given and payment of
the full purchase price is received by the Committee shall be the exercise date for such Stock
Option. From such exercise date, Executive shall be entitled to the issuance of a stock certificate
evidencing Executive’s ownership of the shares of Stock acquired pursuant to such exercise (but
subject to Section 8 hereof). Executive shall not have any of the rights or privi1~ges of a
shareholder of the Company (including, without limitation, rights to distributions, voting rights,
inspection rights, dissenter’s rights, rights to bring a derivative action, or other rights of a
shareholder under applicable corporate law) in respect of any shares of Stock issuable upon
exercise of such Stock Option until and only to the extent such Stock Option is exercised and
certificates representing such shares shall have been issued and delivered.

3.2 Minimum Number of Shares Purchased. Fractional Shares. No fewer than five (5) share (or, if
less, the maximum number of shares that may be purchased pursuant to the Stock Option to the extent
vested but unexercised) may be purchased pursuant to the exercise under anyone notice given under
Section 3 hereof. No installment of such Stock Option shall be exercisable except with respect to
whole shares.

     4. Termination

4.1 In General. The Stock Option granted under Section 1 hereof, to the extent unexercised, shall
terminate at the close of business of the day before the tenth (10th) anniversary of the Grant
Date, but subject to Section 6 or Section 7 hereof (as applicable).

4.2 Corporate Transaction. The Committee shall notify Executive of the pendency of a Corporate
Transaction a reasonable time before such Corporate Transaction is to occur, and Executive (or such
other person entitled to exercise such Stock Option under Section 7 hereof) shall have the right,
at any time prior to such Corporate Transaction, to exercise such Stock Option of such person to
the extent that such Stock Option is otherwise exercisable under Section 2 hereof. Except and to
the extent provided in the Plan and as set forth in the notice under this Section 4.2, the Stock
Option granted under Section 1 hereof to the extent unexercised shall terminate as of the Effective
Date of the Corporate Transaction.

Page 2 of 7 Pages

 

 

     5. Transferability

5.1 In General. Except as provided in Section 5.2 hereof, neither Executive nor any successor or
assignee thereof shall have any power or right to transfer, assign, anticipate, hypothecate or
otherwise encumber any part or all of the Stock Option granted under Section 1 hereof, other than
by Will or by the laws of descent and distribution, and such Stock Option shall be exercisable
during Executive’s lifetime only by Executive; nor shall all or any part of such Stock Option be
subject to seizure by any creditor of any such person, by a proceeding at law or in equity, and no
such benefit shall be transferable by operation of law in the event of the bankruptcy or insolvency
of Executive or any successor or assignee thereof Any such attempted assignment or transfer shall
be void and shall terminate this Agreement, and the Company shall thereupon have no further
liability hereunder.

5.2 Certain Family Transfers. Executive may transfer the Stock Option granted hereunder only under
the following terms and conditions:

5.2.1 Such transfer may only be to (a) a trust of which Executive is a grantor, provided that the
named beneficiaries of such trust shall include only Executive and/or members of Executive’ s
Family (and such a trust shall be unrestricted as to the identity of the trustee or trustees); (b)
a corporation, partnership or limited liability company; provided, that the owners of equity
interests in the foregoing shall consist solely of one or a combination of Executive, member(s) of
Executive’ s Family, or one or more trusts described in the foregoing clause (a); or (c) as an
outright gift one or more members of Executive’ s Family.

5.2.2 Executive and the transferee shall execute and acknowledge such assignments or other
instruments as the Committee may reasonably request, in form and substance reasonably satisfactory
to the Committee, to confirm or memorialize such transfer.

5.2.3 Executive or the transferee shall provide the Committee with the name, address, and taxpayer
identification number of the transferee and such other information as the Committee shall request
to prepare tax returns and other filings reflecting such transfer as are required by applicable tax
laws.

5.2.4 Executive or the transferee shall, at their expense, furnish the Committee with an opinion of
counsel in form and substance satisfactory to the Committee to the effect that such transfer, and
the issuance of shares of Stock to the transferee upon exercise of the Stock Option transferred,
will comply with federal or state securities laws (including, without limitation, any exemption
there under pursuant to which the Company has caused such Stock Option or share to be issued).

5.2.5 The transferee shall have executed and acknowledged this Agreement and shall have assumed all
obligations and liabilities of Executive hereunder.

Page 3 of 7 Pages

 

 

     6.
Cessation of Employment

6.1 In General. Subject to Sections 6.2 and 7 hereof, if Executive ceases to be employed by the
Company or any of Subsidiary or Parent thereof, Executive may, subject to the time limitations of
Section 4 hereof, exercise the Stock Option granted under Section 1 hereof to the extent that
Executive was entitled to exercise it under Section 2 hereof on the date of such cessation at any
time (a) within one (I) year after such cessation if such cessation results from the Disability of
Executive, or (b) otherwise within ninety (90) days after such cessation.

6.2 Termination for Cause. If Executive is terminated as an employee of the Company or any
Subsidiary or Parent thereof for Cause, the Stock Option granted
under Section 1 hereof shall
terminate immediately. .

     7. Death of Executive. If Executive dies while employed by the Company or any Parent or
Subsidiary thereof, or during the period described in clause (a) or clause (b) of Section 6.1
hereof as applicable, then, subject to the time limitations of Section 4 hereof, the Stock Option
granted under Section 1 hereof shall expire within one (1) year after the date of death; and the
executor or administrator of Executive ‘ s estate, or the person or persons to whom Executive’s
rights under such Stock Option shall have passed by Will or by the applicable laws of descent and
distribution, shall have the right to exercise such Stock Option to the extent that Executive was
entitled to exercise such Stock Option under Section 2 hereof on the date of death.

     8. Compliance With Securities and Tax Laws. No shares of Stock shall be issued
pursuant to the exercise of the Stock Option hereunder except in compliance with all applicable
federal and state securities and tax laws and regulations and in compliance with rules of stock
exchanges on which the Stock may be listed. In furtherance of the foregoing and not in order to
limit the generality of the foregoing in any way:

8.1 Representation. The Company, as a condition to the issuance of such shares, may require the
person exercising such Stock Option to represent and warrant at the time of such exercise that any
shares of Stock acquired upon exercise are being acquired only fur investment and without any
present intention to sell or distribute such shares if, in the opinion of counsel for the Company,
such a representation is required under any applicable law, regulation or rule of any governmental
agency.

8.2 Notice of Sale. The person acquiring such shares shall give the Company notice of any sale or
other disposition of any such shares not less than ten (10) days after such sale or other
disposition.

8.3 Withholding. Executive acknowledges and agrees that the Company, in order to fulfill its
withholding obligations under any federal, state or local tax law upon exercise of the Stock
Option, may (a) withhold such sums from other compensation due Executive, (b) require Executive to
pay to the Company such amounts as a condition to the delivery of shares pursuant to

Page 4 of 7 Pages

 

 

such exercise, or ( c) sell shares that would otherwise be delivered to Executive upon exercise of
the Stock Option in order to raise cash in the necessary amount.

     9.
Miscellaneous

9.1 Complete Agreement. This Agreement, and any appendices, schedules, exhibits or documents
referred to herein or executed contemporaneously herewith, constitute the entire agreement among
the parties hereto with respect to the subject matter hereof, and supersede all prior written, and
all prior and contemporaneous oral, agreements, representations, warranties, statements, promises
and understandings with respect to the subject matter hereof, whether express or implied. All
schedules, appendices and exhibits attached hereto are hereby incorporated in and made a part of
this Agreement as if fully set forth herein.

9.2 Payments Subject to Creditors. Payments to Executive hereunder shall be made from assets which
shall continue, for all purposes, to, be a part of the general assets of the Company; and no
person, other than the Company, shall have, by virtue of the provisions of the Plan or the grant of
the Stock Option hereunder, any interest in such assets. To the extent that any person acquires a
right to receive payments from the Company under the provisions hereof, such right shall be no
greater than the right of any unsecured general creditor of the Company.

9.3 No Trust or Contract of Employment. It is expressly understood by the parties hereto that this
Agreement and the Plan relate exclusively to additional compensation for Executive’s services, and
are not intended to be an employment contract. Nothing contained in this Agreement or the Plan, and
no action taken pursuant to their provisions by either party hereto shall create, or be construed
to create, (a) a trust of any kind, or a fiduciary relationship between the Company and Executive;
or (b) a contract of employment for any term of years, or a right of Executive to continue in the
employ of the Company in any capacity.

9.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company
and its succeSSOI5 and assigns, and Executive and Executive’s successors, assigns, heirs,
executors, administrators and beneficiaries. Nothing in this Section 9.4 shall be deemed to modify
or waive in any manner whatsoever such prohibitions on transfer or assignment of Executive’s rights
hereunder as are contained elsewhere in this Agreement.

9.5 Amendment. Except as provided herein, this Agreement may not be amended, altered, modified or
terminated except by a written instrument signed by the parties hereto, or their respective
successors or assigns.

9.6 Notice. Whenever this Agreement or the Plan requires that notice be given by or to the Company
or Executive, such notice shall be given to the Company at the address first set forth above (or to
such other address as the Company may communicate to Executive under this Section 9.6) and to
Executive at such address as is set forth on the books and records of the Company for the mailing
of any Form W-2 with respect to Executive as follows: (a) by personal

Page 5 of 7 Pages

 

 

delivery, in which case notice shall be deemed to have been given on the date of delivery; (b) by
certified United States mail, in which case notice shall be deemed to have been given two (2) days
after deposit of such notice with the United States Postal Service; or (c) by DHL, Federal Express,
United Parcel Service, or similar internationally-recognized overnight delivery service, in which
case notice shall be deemed to have been given one (I) day after deposit of such notice or
instrument with such service

9.7 Governing Law. Jurisdiction. This Agreement shall be governed by the laws of the State of
California, regardless of the choice of law provisions of California or any other jurisdiction and
regardless of where the parties hereto may now or hereafter be formed, do business, or reside. Any
and all disputes between the parties which may arise pursuant to this Agreement will be heard and
determined before an appropriate federal or state court located in Los Angeles, California. The
parties hereto ackn0’Yledge that such court has the jurisdiction to interpret and enforce the
provisions of this Agreement and the parties waive any and all objections that they may have as to
personal jurisdiction or venue in any of the above courts.

9.8 Headings. The headings in this Agreement are inserted only as a matter of convenience, and in
no way define, limit, or interpret the scope of this Agreement or of any particular section hereof.

9.9 Waivers Strictly Construed. With regard to any power, remedy or right provided herein or
otherwise available to any party hereunder, (a) no waiver or extension of time shall be effective
unless expressly contained in a writing signed by the waiving party, and (b) no alteration,
modification or impairment shall be implied by reason of any previous waiver, extension of time,
delay or omission in exercise, or by any other indulgence.

9.10 Severability. The validity, legality or enforceability of the remainder of this Agreement
shall not be affected even if one or more of the provisions of this Agreement shall be held to be
invalid, illegal or unenforceable in any respect.

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

Page 6 of 7 Pages

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth
above.

	 	 	 	 	 	 	 	 	 
	“Company”	 	 	 	“Executive”  
	 
	 	 	 	 	 	 	 	 
	SAVE THE WORLD AIR, INC.,	 	 	 	 	 	 
	a Nevada corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 

Page 7 of 7 Pages

 

 

SPOUSAL CONSENT

I certify that:

     1. I
am the spouse of      who signed the foregoing Non-Qualified Stock Option
Agreement dated as of      .20- ( the “Agreement”) by and between —  as the
“Executive” thereunder and Save The World Air, Inc. as the “Company” thereunder.

     2. I have read and approve the provisions of the Agreement, including, but not limited
to, those relating to the exercise, transfer and disposition of the Stock Option described therein.

     3. I agree to be bound by and accept those provisions of that Agreement in lieu of all
other interests I may have in the Stock Options thereby granted, whether that interest may be
community property or otherwise.

     4. Executive shall have full power of management of Executive . s interests in the Stock
Options, including any portion of those interests that may be community property, and Executive has
the full right, without my further approval, to exercise Executive’s rights with respect to such
Stock Options, to execute any amendments to the Agreement, and to exercise and otherwise deal in
any manner with such Stock Options, including any portion of such interests that may be community
property.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	

	 	 	 	 	 	Name of spouse:	 	 
	

	 	 	 	 	 	 	 	 

 

 

APPENDIX A

GLOSSARY OF TERMS

1. “Agreement” means the Non-Qualified Stock Option Agreement dated                     
20- by and between Save The Wodd Air, Inc., a Nevada corporation, as the “Company” thereunder,
and                     , an individual, as the “Executive” thereunder.

	2.  	“Board” is as defined in Recital “A” of the Agreement.
	 
	3.  	 “Cause” is as defined in the Plan.
	 
	4.  	“Committee” is as defined in the Plan.
	 
	5.  	“Company” means Save The World Air, Inc., a Nevada corporation.
	 
	6.  	“Corporate Transaction” is as defined in the Plan.
	 
	7.  	“Disability” is as defined in the Plan.
	 
	8.  	“Effective Date” of a Corporate Transaction is as defined in the Plan.
	 
	9.  	“Executive” means                     , an individual.
	 
	10.  	“Exercise Price” is as defined in Section 1 of the Agreement.
	 
	11.  	“Family” is as defined in the Plan.
	 
	12.  	“Grant Date” is as set forth in the first paragraph of the Agreement.
	 
	13.  	“Non-Qualified Stock Option” is as defined in the Plan.
	 
	14.  	“Parent” is as defined in the Plan.
	 
	15.  	“Plan” is as defined in Recital” A” of the Agreement.
	 
	16.  	“Stock” is as defined in the Plan.
	 
	17.  	“Stock Option” is as defined in the Plan.
	 
	18.  	“Subsidiary” is as defined in the Plan.
	 
	19.  	“Will” is as defined in the Plan.

(1)exv10w20

 

Exhibit 10.20

CONSULTING AGREEMENT

     This Consulting Agreement (“Agreement”), is made effective and entered into as of April
1,2003 by and between Save the World Air, Inc., a Nevada corporation (the “Company”), and Adrian
Menzell (“Consultant’).

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 multipoint
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 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.

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

     Section I. 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 project management and supporting the project lead and development team, as the Company
may request from time to time. Without limiting the generality of the foregoing, Consultant
shall:

     (a) R&D. Consultant shall undertake and perform the tasks outlined on Annex A hereto and
such additional or other responsibilities as may be reasonably assigned to Consultant from time to
time by the Company’s Chief Executive Officer, Chief Operating Officer, or Director of Research
and Development.

 

 

     (b) Reports. Consultant shall assist in the preparation of regular monthly reports to
the Company on the efforts expended and undertaken on each project assigned to or undertaken by
Consultant. Consultant shall maintain and make available to the Company upon request complete
records for purchases, products, prices, analyses, testing and test results, contacts, drawings
and such other matters as the Company may request from time to time.

     (c) Procedures for Maintaining Proprietary Information. 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.

     (d) Travel. The Company may require Consultant to travel at Company expense to its U.S.
offices and facilities at least twice per year and internationally from time to time as may be
reasonably required to fulfill Consultant’s assigned duties and responsibilities, provided that
each such trip shall not exceed two weeks without Consultant’s consent.

     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 to provide to the Company the services described in Section
1 above;

          (b) The Company may require Consultant to travel to its U.S. offices and facilities at
the Company’s expense at least twice per year and internationally from time to time as may be
reasonably required to fulfill Consultant’s assigned duties and responsibilities, provided that
each such trip shall not exceed two weeks without Consultant’s consent.

          (c) 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

Consulting Agreement — A Menzell v7

 -2

 

 

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.

          (d) 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.

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

          (f) Consultant shall maintain any and all 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 acquire any products in order to render the consulting services
contemplated hereby, Consultant shall be solely responsible for the payment 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 all 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.

          (g) 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 all 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 March 31,2005, 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

Consulting Agreement  —  A MenzeU v7

 -3

 

 

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 make other expenditures to carry
out Consultant’s duties hereunder, the Company shall reimburse Consultant for 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
and 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. Company.

     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. Indemnification. If Consultant becomes a defendant in, or is threatened to be
made a party to, a Claim by reason of (or arising in part out of) an Identifiable Event, the
Company shall indemnify, defend and hold harmless Consultant against any and all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such Expenses, judgments,
fines, penalties or amounts paid in settlement) of any Claim, subject to any limitations set forth
herein below. For purposes of this section, the following terms shall have the meanings set forth
below:

     (a) “Claim” shall mean any threatened, pending or completed action, suit or proceeding
against Consultant, whether civil, criminal, administrative, investigative or other.

     (b) “Expenses” shall mean attorneys’ fees and all other costs, expenses and obligations paid
or incurred by Consultant arising from defense of a Claim.

     (c) “Identifiable Event” shall mean any act or omission of Consultant in carrying out
Consultant’s duties under this Agreement that is (i) other than a criminal act and (ii) within the
scope of Consultant’s services to the Company under this Agreement, including without limitation
Claims alleging facts based on theories of negligence; violation of securities laws in connection
with the offer and sale of the Company’s securities; that the Consultant is or was an agent,
employee or fiduciary of the Company; or that Consultant is or was serving at the request

Consulting Agreement  —  A MenzelI v7

 -4-

 

 

of the Company as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or relating to anything done or not done by the Consultant in any such
capacity.

     Section 11. Amendments; Consents. No amendment, modification, supplement, termination, or
waiver of any provision in this Agreement, and no consent to any departure there from, 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 12. 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 mailing by 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 13. 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 14. 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
transferred by Consultant without the prior written consent of the Company.

     Section 15. 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.

     Section 16. Survival. The rights and obligations provided in Section 3(c), Section 4,
Section 9, Section 10, Section 14, Section 20 and paragraph (c) of Annex C hereto shall survive
termination of this Agreement.

     Section 17. Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.

     Section 18. 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.

     Section 19. Headings. Headings of this Agreement are included for convenience only and shall
not be considered a part of this Agreement for any other purpose.

Consulting Agreement — A Menzell v7

 -5

 

 

     Section 20. 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 21. 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.

     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/ A. MENZELL 
	

	 	 	 	 
	

	 	Name:	 	Adrian Menzell 
	

	 	 	 	 
	 
	 	 	 	 
	 	 	SAVE THE WORLD AIR, INC.
	 
	 	 	 	 
	

	 	By	 	/s/ EUGENE E. EICHLER 
	

	 	 	 	 
	

	 	Name:	 	Eugene E. Eichler 
	

	 	 	 	 
	

	 	Title:	 	Chief Operating Officer 
	

	 	 	 	 

Consulting Agreement — A Menzell v7

-6

 

 

ANNEX A

CONSUL TANT’S DUTIES AND RESPONSIBILITIES

	 	 	 
	

	 	 
	 

	•  	The design, development of new configurations and testing of all
units.
	 
	•  	All mechanical repairs that need to be performed to have the vehicles running correctly
and diagnose and rectify problems before and during testing.
	 
	•  	Assisting with the ordering, organizing and purchase of products and plant and
equipment, etc.
	 
	•  	Decision making in relation to such issues as leasing of workshops and insurance
needs, etc.
	 
	•  	Assist in preparatory reports to the Company in relation to the ZEFS devices.
	 
	•  	Development of new ways of dealing with the issue of multi-port fuel injection along
with Pat Baker.
	 
	•  	Control the ordering, organizing and purchase of products and plant and equipment
relating to the development and supply of the devices.
	 
	•  	Show and explain the basic principles of the operation and functions of an engine
e.g. multi-point fuel injection and engine management systems and all associated items.
	 
	•  	Look at all new possible sites and to determine the conditions of vehicles and
fitting
stations, talk to transport authorities and to talk and set up standards with other
engineering and technical personnel.
	 
	•  	Look at all working relations and access the progress and development of all new and
upcoming devices including the assessment of all the multi-fuel injection systems.

 

 

     ANNEX “B”

CONFIDENTIALITY AGREEMENT

     This
Confidentiality Agreement (“Agreement”) dated as of
April 1, 2003, 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 provide Policies and
Procedures and other services as called upon from time to time.
	 
	 	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 techniques 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.

 

 

Save the World Air, Inc.

     (iv) Any information described above which Company obtains from another party and which
Company treats as proprietary or 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 IN 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 generality of the foregoing,
during the term hereof and after termination of Consultant’s employment with the Company,
Consultant shall not use, build, reverse-engineer, decompile, modify for use or disassemble any 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 to the Company; (ii) execute, acknowledge, and deliver any and

2

 

Save the World Air, Inc.

all instruments necessary to confirm the Company’s complete ownership of the 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 all of his
right, title and inters 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 all 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 permitted to be given in writing and will be
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.

3

 

Save the World Air, Inc.

     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 but one and the same instrument.

     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 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.

     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 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)

4

 

Save the World Air, Inc.

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
	

	 	 	 	 
	

	 	 	 	Eugene E. Eichler

Its Chief Financial Officer

	 	 	 	 	 
	 	 	CONSULTANT
	 
	 	 	 	 
	

	 	By	 	/s/ ADRIAN MENZELL
	

	 	 	 	 
	

	 	 	 	Name Adrian Menzell
	

	 	 	 	Address:

5

 

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) Consulting Fees. The Company shall pay Consultant compensation equal to AU$7,000 per
month, payable semi-monthly in accordance with the Company’s usual payroll practices. Such
consulting fees shall be payable to Consultant by no later than the twenty-fifth (25th) day of
each calendar month, provided the Company shall have received from Consultant (i) a reasonably
detailed accounting of consulting services rendered by Consultant during the immediately preceding
month by no later than the fifth day of the calendar month, together with (ii) any supporting
documentation for such accounting as the Company may reasonably request from Consultant by no
later than five Business Days following the date of such request. The term “Business Day” as used
herein shall mean any day other than a Saturday, Sunday or a day on which banks in Los Angeles,
California are authorized or required to be closed.

     (b) Equity Incentives. Subject to compliance with applicable securities laws, the
Company shall grant and/or issue to Consultant Common stock awards for an aggregate of
200,000 shares of Company common stock, as follows:

	 	 	 	 	 	 	 	 	 
	Type of shares:	 	Common Stock.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Number of shares:	 	Grant 1:	 	 	100,000	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	Grant 2:
	 	 	100,000	 
	 
	 	 	 	 	 	 	 	 
	Award vesting:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Grant 1:	 	On the first anniversary of this Agreement.
	 
	 	 	 	 	 	 	 	 
	 	 	Grant 2:	 	On the second anniversary of this Agreement.

 

 

	 	 	 	 	 
	

	 	Other:
	 	Upon vesting of Grant 1 or Grant 2, the Company shall promptly deliver stock certificates to
Consultant evidencing the number of shares having then vested. Consultant must be engaged or
employed by the Company at the time of the award; provided that the award shall vest automatically
if Consultant is terminated without cause prior to expiration of the term of the Agreement. The
Company shall provide Consultant with a separate ''Notice of Stock Grant.”

	   	(c). Other Incentives. The Company shall pay and/or provide to Consultant the following:

	 	 	 	 	 
	

	 	 	 	A royalty of {US$0.25 per unit or ZEFS device sold by the Company
(after allowance for any returns and return reserves). The royalty
shall be payable 30 days after the close of each quarter in arrears.

Royalties shall be payable 30 days after the close of each quarter in
arrears.

Consulting Agreement  —  A Menzell v7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]