EXHIBIT 10.20
PROMISSORY NOTE AND PLEDGE
Cambridge, Massachusetts
October 10, 2000
For value received, (the "Participant") promises to pay to the
order of Nuvera Fuel Cells, Inc. (the "Company") (the "Loan"), the
principal amount of which will be repayable in full on April 1, 2002 of the date
hereof (the "Payment Date") subject to prepayment as set forth below; provided
that if the Participant is permitted to and does dispose of any shares of Common
Stock of the Company (the "Shares") pledged hereunder, the proceeds of any such
sale shall be used by the Participant as follows: first to pay any accrued but
unpaid interest on the Loan and second to repay the principal amount of the Loan
(or a portion thereof), promptly upon receipt of such proceeds. The Participant
promises to pay on the Payment Date all accrued and unpaid interest on the Loan
on such date as well as all outstanding principal on such date.
In addition, if Participant shall cease to be employed by the Company and
its Subsidiaries for any reason, any outstanding principal and interest
hereunder shall become immediately due and payable. Interest will accrue on the
outstanding principal amount of the Loan, and will be compounded annually, at a
rate of 8.50% per annum and shall be payable as of the payment date of the
principal amount of the Loan to which such interest relates. The Participant may
prepay the Loan without penalty in whole at any time, or from time to time in
part, by paying the principal amount to be prepaid, together with all accrued
interest on the amount to be prepaid to the date of prepayment.
On April 1, 2001, one-half of the principal of the Loan, and the accrued
interest relating thereto, will be forgiven, and on April 1, 2002, the remaining
principal of the Loan, and the accrued interest relating thereto, will be
forgiven, provided in each case that the Participant has remained continuously
employed by the Company or a subsidiary of the Company from the date hereof
through the applicable date.
To secure payment of the principal of and all interest on the Loan, the
Participant hereby assigns, pledges and grants a security interest in and
delivers to the Company 88 Shares issued to the Participant by the Company
pursuant to the stock grant letter dated October 10, 2000 (collectively, the
"Collateral"). The Participant is delivering certificates representing such
Shares in pledge hereunder.
The Company's recourse under this Promissory Note and Pledge is limited
solely to the Collateral.
Certificates evidencing the Shares pledged hereunder shall remain in the
physical custody of the Company or its designee at all times until Participant
has made payment in full of all principal of and interest on the Loan, except
for (i) transfers permitted by the Company so long as the proceeds of such sale
are applied as provided herein and/or (ii)
<PAGE>
releases for permitted purposes hereunder; provided that in either case, in its
reasonable discretion, the Company determines that the remaining Collateral is
sufficient. A proportionate number of the Shares pledged hereunder shall be
released if any principal amount of the Loan, together with all accrued
interest on the amount to be prepaid to the date of payment, is prepaid by the
Participant.
This Promissory Note and Pledge constitutes a security agreement for
purposes of the Uniform Commercial Code in all relevant jurisdictions. Upon the
nonpayment of principal or interest when due hereunder (a "Default"), the
Company (i) may, by notice to the Participant, declare the Loan (together with
accrued and unpaid interest thereon) to be, and the Loan shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Participant and (ii) shall
have all the rights and remedies of a secured party provided in the Uniform
Commercial Code.
The Shares pledged hereunder are granted as security only and shall not
subject the Company to, or in any way affect or modify, any obligation or
liability of the Participant with respect to any of its Collateral or any
transaction in connection therewith. The Participant agrees that he or she will,
at the Company's expense and in such manner and form as the Company may
reasonably require, execute, deliver, file and record any financing statement,
specific assignment or other paper and take any other action that may be
reasonably necessary or desirable, and that the Company may reasonably request,
in order to create, preserve, perfect or validate any security interest in the
Collateral or to enable the Company to exercise and enforce its rights hereunder
with respect to any of the Collateral.
To the extent a Default shall have occurred and be continuing, the Company
may cause any or all of the Shares pledged hereunder to be transferred of record
into the name of the Company or its nominee. The Participant will promptly give
to the Company copies of any notices or other communications received by him or
her with respect to Shares registered in the name of the Participant, and the
Company will promptly give to the Participant copies of any notices and
communications received by the Company with respect to Shares registered in the
name of the Company or its nominee.
If a Default shall have occurred and be continuing, the Company shall have
the right to receive and to retain as Collateral hereunder all dividends,
interest and other payments and distributions made upon or with respect to the
Collateral from the date of such Default and for so long as it is continuing,
and the Participant shall take all such action as the Company may deem necessary
or appropriate, in its reasonable discretion, to give effect to such right. All
such amounts received by the Company shall be applied first to meet any accrued
and unpaid interest and secondly to repay principal amount of the Loan then
outstanding.
Unless a Default shall have occurred and be continuing, the Participant
shall have the right, from time to time, to receive and retain all cash
dividends, interest and other payments and distributions made upon or with
respect to the Collateral and to vote and to
<PAGE>
give consents, ratifications and waivers with respect to the Shares pledged
hereunder, and the Company shall deliver to the Participant or as specified in
such request such proxies, powers of attorney, consents, ratifications and
waivers in respect of any of the Shares which is registered in the name of the
Company or its nominee, in either case as shall be specified in such request
and be in form and substance satisfactory to the Company.
If a Default shall have occurred and be continuing, the Company shall have
the right to the extent permitted by law and the Participant shall take all such
action as may be necessary or appropriate to give effect to such right, to vote
and to give consents, ratifications and waivers and take any other action with
respect to any or all of the Shares pledged hereunder with the same force and
effect as if the Company were the absolute and sole owner thereof.
The Participant hereby irrevocably appoints the Company its true and lawful
attorney, with full power of substitution, in the name of the Participant, the
Company or otherwise, for the sole use and benefit of the Company, but at the
expense of the Company, to the extent permitted by law to exercise, at any time
and from time to time while a Default has occurred and is continuing, all or any
of the following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any and
all monies due to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if the Company were
the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto; provided that the
Company shall give the Participant not less than ten days' prior written notice
of the time and place of any sale or other intended disposition of any of the
Collateral. The Company and the Participant agree that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the Uniform
Commercial Code.
For the purpose of this Promissory Note and Pledge, notices and all other
communications provided for in this Promissory Note and Pledge shall be in
writing and shall be given to the respective addresses or telecopy numbers set
forth on the execution page of this Promissory Note and Pledge.
This Promissory Note and Pledge is predicated upon and is contingent upon
the Participant agreeing that Nuvera shall remain the exclusive owner of the
Proprietary Information and all patent, copyright, trade secret, trademark and
other intellectual property rights created by the Participant during the period
of his or her employment. In accepting this Promissory Note and Pledge, the
Participant agrees not to act in any
<PAGE>
manner that is to the detriment of Nuvera. As evidence of such commitment, for
a period of one year after the satisfaction of this Promissory Note and Pledge,
the Participant will not either alone or in association with others solicit any
employee of Nuvera to leave the employ of Nuvera or hire or engage as an
independent contractor, any person who was employed by Nuvera at any time.
No failure or delay by the Company in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Any provision of this Promissory Note and Pledge may be amended or waived
if, and only if, such amendment or waiver is in writing and is signed by the
Participant and the Company. The provisions of this Promissory Note and Pledge
shall be binding upon the Participant and his successors, assigns, personal
representatives, estate and heirs and shall inure to the benefit of the Company
and its successors and assigns.
This Promissory Note and Pledge shall be governed by and construed in
accordance with the laws of the State of Massachusetts.
Upon the repayment in full of the principal of and interest on the Loan,
the security interest shall terminate and all rights to the Collateral shall
revert to the Participant, and the Company shall take all actions which may
reasonably be requested by Participant to reflect the termination of such
security interest. In addition, in the case of a transfer of the Collateral
permitted hereunder in which the proceeds are applied as provided herein or any
release of Shares permitted hereunder, the security interest in the Collateral
so transferred or released shall terminate and the Company shall take all
actions which may reasonably be requested by Participant to reflect the
termination of such security interest. Without limitation to the foregoing, the
Company shall file UCC-3s if UCC-1s were filed.
This Promissory Note and Pledge, together with the relevant portions of the
Plan and any instrument evidencing an award thereunder constitute the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof.
<PAGE>
This Promissory Note and Pledge may be executed in multiple counterparts,
each of which shall constitute an original, and all of which together shall
constitute one and the same agreement.
------------------
Name:
Address:
c/o Nuvera Fuel Cells, Inc.
Acorn Park
Cambridge, Massachusetts
02140
Agreed and Acknowledged
NUVERA FUEL CELLS, INC.
---------------------
By:
Name:
Title:
Nuvera Fuel Cells, Inc.
Cambridge, Massachusetts
02140
