DEBT SETTLEMENT AGREEMENT 

 

This Debt Settlement Agreement (the “Agreement”) is made and entered into as of
December 31, 2014, by and between Stratean Inc., a Nevada corporation
(“Stratean”), and Burkeley J. Priest, an Individual (“Priest”), with respect to
the following.

 

RECITALS

 

A. Priest is the holder of a $33,341 Promissory Note (the “Debt”) dated February
24, 2014.

 

B. Stratean is the owner and holder of U.S. Patent No. 8,105,401 (“Parallel
Path, Downdraft Gasifier Apparatus and Method”), and U.S. Patent No. 8,518,133
(“Parallel Path, Downdraft Gasifier Apparatus and Method”) (the “Patents”)

 

C. Stratean and Priest agree to settle and resolve the Debt in full upon the
following terms and conditions.

 

TERMS AND CONDITIONS

 

1. Stock. Promptly after execution of this Agreement, Stratean shall cause to be
issued to Priest 38,342 shares of Stratean Inc. $0.001 par value common stock
(the “Stock”).

 

2. Royalty. Stratean shall pay to Priest or his designee a royalty("Royalty") of
one-half of one percent(.5%) of "Gross Revenues" derived from the "Sale of
Stratean Downdraft Gasifer units".

 

a) "Gross Revenues" are defined as the monies actually received by Stratean Inc.
arising from the sale of its units.

 

b) "Sale of Stratean Downdraft Gasifer Units" is defined as revenues received by
Stratean as a direct result of the occurrence of a sale of physical gasifier
units to third parties.

 

c) The Royalty shall have a life of 10 years and will expire at 11:59 PM on
December 31, 2024

 

d) Stratean shall render statements and make payments to Priest quarterly within
sixty (60) days after the last day of each March, June, September and December.

 

e) All other revenues generated by Stratean Inc. whether related to the
Downdraft Gasifier or otherwise is explicitly excluded.

 

f) Priest has the right upon written notice to assign its royalty rights to any
designee until expiration.

 

 

 

g) Stratean shall be free to exercise all the rights of ownership of its
property and intellectual property including the right to sale its intellectual
property and make licensing and sub-license agreements without consulting Priest
and upon whatever terms it deems wise.

 

3. Release and Satisfaction. Upon receipt of the Stock, Priest acknowledges and
agrees that the Debt (including all interest, costs and attorney’s fees
associated therewith) shall be deemed satisfied and paid in full. Priest agrees
that, subject to receipt of the Stock, all claims of Priest against Stratean
Inc. and its management, shall be deemed released.

 

4. Representations and Covenants of Stratean. Stratean represents and covenants
to Priest as follows:

 

A. The issuance of the Stock has been duly authorized by all required corporate
action and, when issued, will be fully paid and nonassessable.

 

B. If at any time Stratean decides, in its sole discretion, to register
securities with the Securities and Exchange Commission (the “Commission”),
Stratean agrees that it shall cause the Stock to be registered along with
whatever other securities it chooses to register on Form S-1, at no further cost
to Priest.

 

C. Stratean is the owner of the Patents.

 

5. Acknowledgments and Representations of Priest. Priest represents and
acknowledges as follows:

 

A.                  That Priest is the sole holder of the Debt, and has full
power and authority to enter into and perform the terms of this Agreement.
Priest agrees and covenants not to institute or cause to be instituted any suit
or other form of action or proceeding of any kind or nature against Stratean, or
its predecessors, assigns, successors, officers, directors, agents, or
affiliates to collect or attempt to collect the Debt.

 

B.               Intentionally left Blank.

 

C. That:

 

(a) the Stock is “restricted securities” as that term is defined in Rule 144
promulgated by the Commission under the Securities Act of 1933, as amended (the
“Securities Act”), the resale of the Stock is restricted by federal and state
securities laws and, accordingly, the Stock must be held indefinitely unless its
resale is subsequently registered under the Securities Act or an exemption from
such registration is available for its resale;

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(b) Other than as contemplated herein, Priest acknowledges that Stratean has not
undertaken, and will have no obligation, to register any shares of the Stock
under the Securities Act;

 

(c) By completing the Questionnaire, attached hereto as Exhibit “A,” Priest is
representing and warranting that it is an accredited investor as the term is
defined in Rule 501 of Regulation D under the Securities Act;

 

(d) The decision to execute this Agreement and acquire the Stock agreed to be
purchased hereunder has not been based upon any oral or written representation
as to fact or otherwise made by or on behalf of Stratean;

 

(e) Priest and Priest's advisor(s) have had a reasonable opportunity to ask
questions of and receive answers from Stratean in connection with the issuance
of the Stock hereunder, and to obtain additional information, to the extent
possessed or obtainable without unreasonable effort or expense, necessary to
verify the accuracy of the information about Stratean;

 

(f) The books and records of Stratean were available upon reasonable notice for
inspection, subject to certain confidentiality restrictions, by Priest during
reasonable business hours at its principal place of business, and all documents,
records and books in connection with the distribution of the Stock hereunder
have been made available for inspection by Priest, Priest's lawyer and/or
advisor(s);

 

(g) Stratean is entitled to rely on the representations and warranties of Priest
contained in this Agreement and the Questionnaire;

 

(h) Priest will indemnify and hold harmless Stratean and, where applicable, its
directors, officers, employees, agents, advisors and shareholders, from and
against any and all loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all fees, costs and expenses whatsoever
reasonably incurred in investigating, preparing or defending against any claim,
lawsuit, administrative proceeding or investigation whether commenced or
threatened) arising out of or based upon any representation or warranty of
Priest contained in this Agreement, the Questionnaire or in any document
furnished by Priest to Stratean in connection herewith being untrue in any
material respect or any breach or failure by Priest to comply with any covenant
or agreement made by Priest to Stratean in connection therewith;

 

(i) Priest has been advised to consult Priest's own legal, tax and other
advisors with respect to the merits and risks of an investment in the Stock and
with respect to applicable resale restrictions, and it is solely responsible
(and Stratean is not in any way responsible) for compliance with: (i) any
applicable laws of the jurisdiction in which Priest is resident in connection
with the distribution of the Stock hereunder, and (ii) applicable resale
restrictions;

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(j) Neither the Commission nor any other securities commission or similar
regulatory authority has reviewed or passed on the merits of the Stock;

 

(k) No documents in connection with the sale of the Stock hereunder have been
reviewed by the Commission or any state securities administrators;

 

(l) Priest is aware that an investment in Stratean is speculative and involves
certain risks, including the possible loss of the entire investment;

 

(m) Priest (i) has adequate net worth and means of providing for its current
financial needs and possible personal contingencies, (ii) has no need for
liquidity in this investment, and (iii) is able to bear the economic risks of an
investment in the Stock for an indefinite period of time;

 

(n) Priest (i) is able to fend for itself; (ii) has such knowledge and
experience in business matters as to be capable of evaluating the merits and
risks of its prospective investment in the Stock; and (iii) has the ability to
bear the economic risks of its prospective investment and can afford the
complete loss of such investment;

 

(o) Priest is not an underwriter of, or dealer in, the common shares of
Stratean, nor is Priest participating, pursuant to a contractual agreement or
otherwise, in the distribution of the Stock;

 

(p) Priest is not aware of any advertisement of any of the Stock and is not
acquiring the Stock as a result of any form of general solicitation or general
advertising including advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or broadcast over radio or
television, or any seminar or meeting whose attendees have been invited by
general solicitation or general advertising; and

 

(q) Priest acknowledges and agrees that Stratean shall not consider the Priest's
subscription for acceptance unless the undersigned provides to Stratean, along
with an executed copy of this Agreement: (i) a fully completed and executed
Questionnaire in the form attached hereto as Exhibit A, and (ii) such other
supporting documentation that Stratean or its legal counsel may request to
establish Priest's qualification as a qualified investor. 

 

 

 

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed this Agreement as on the day and
year first written above.

 

Stratean Inc., a Nevada corporation

 

By/s/S. Matthew Schultz

S. Matthew Schultz, Its CEO

  

Burkeley J. Priest, an Individual

  

By_/s/ Burkeley J. Priest

__________________________

Its ________________________

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