Document:

Letter Agreement, dated October 8, 2008

 Exhibit 10.1 
 

 
 September 30, 2008 
 Marie J.
Toulantis 
 875 Fifth Avenue 
 New York, New York 10021

 Dear Marie: 
 This letter is intended to set
forth our agreement regarding your resignation as Chief Executive Officer of barnesandnoble.com llc (the “Company”) with the approval of the Company. This letter agreement is subject to the terms of the Release (as defined in paragraph 9
below) and, specifically without limitation, this letter agreement shall be deemed null and void in the event that (a) the Release is not executed and delivered by you in accordance with paragraph 9 below; or (b) the Release is revoked by
you in accordance with paragraph 5 of the Release. The letter agreement shall be deemed effective in accordance with, and as of the date that the Release is effective pursuant to, paragraph 5 of the Release (the “Effective Date”).

 1. Employment Resignation; Consultancy. You hereby resign as an employee of the Company and any of its subsidiaries or affiliates
effective as of the close of business on August 19, 2008 (the “Resignation Date”). Commencing as of the Resignation Date, you shall be available to consult with the Company from time to time at mutually agreeable times and for
mutually agreeable and reasonable periods through January 30, 2010, provided, however, that your failure to provide such services shall in no way affect the payments and benefits you are entitled to receive hereunder. To the extent that you
provide such services, you will receive reasonable compensation for the time expended by you which exceeds fifteen (15) hours per month, and reimbursement of reasonable expenses approved in advance by the Company. 
 2. Compensation and Benefits. You acknowledge that as of the Resignation Date, all compensation and benefits of any kind to which you were, are or
may be entitled pursuant to the employment agreement with the Company, dated as of March 9, 2005 (“Employment Agreement”) or otherwise, have ended, and all compensation, benefits or other payments or consideration to which you are or may
be entitled as of and after the Resignation Date are set forth exclusively in this letter agreement. In consideration for and subject to the terms of this letter agreement and the Release, the Company shall pay you the gross amount of $875,000.00,
less applicable withholdings and deductions. To the extent you would have been entitled, had your employment with the Company continued without interruption, to any bonuses for the Company’s fiscal year ending January 31, 2009
(“Fiscal 2008”) in accordance with the pre-established target set by the Compensation Committee of the Barnes & Noble, Inc. (“B&N”) Board of Directors, based upon the attainment certification by such Committee in the
ordinary course, you shall receive the full amount of such bonuses. Such bonuses shall be paid in cash in calendar year 2009 as and when paid by the Company to senior 
 122 Fifth Avenue, New York, NY 10011 tel: (212) 633-3300 

 Marie J. Toulantis 
 September 30, 2008 
  Page
 2
 of 5 
  

 
executives of B&N. Notwithstanding anything contained herein to the contrary, you shall receive the foregoing bonuses in the aggregate amount of not less
than $487,500 (i.e. 75% of your annual base salary). To the extent that any bonuses for Fiscal 2008 would have included a grant of restricted shares, you shall receive in lieu thereof the cash value of such shares based on the closing stock price of
such shares on the last trading date immediately preceding the date such bonus is paid to you in accordance with the foregoing sentence. If you make a timely and proper election for continuation coverage under Code Section 4980B (a COBRA
election), the Company shall pay your COBRA coverage so that you continue to receive medical benefits, subject to the terms of the medical plan and COBRA, through January 31, 2009. 
 3. Stock Options and Restricted Stock. As of the Effective Date, subject to receipt by the Company of the executed Release (as defined below) and
the continued effectiveness of the Release following the Revocation Period referred to therein, all vesting restrictions regarding stock options and restricted stock that have been previously granted to you by B&N shall lapse and all such stock
options and restricted stock shall then be fully vested. Each of your vested, unexercised stock options must be exercised by the earlier of (i) the option’s original expiration date or (ii) May 1, 2009. Any stock options not
exercised by such date will be forfeited without payment to you of any kind and will no longer be exercisable. 
 4. Protective
Covenant. For a period of one year following the Effective Date, you will not directly or indirectly, either as principal, agent, stockholder, employee or in any other capacity, engage in any business on behalf of or have a financial interest in
Amazon, Borders or any affiliates or subsidiaries of either entity. Nothing in this paragraph 4 shall be construed as denying you the right to own securities of any corporation listed on a national securities exchange or quoted in the NASDAQ System
to the extent of an aggregate of 5% of the outstanding shares of such securities. You acknowledge that the foregoing limitations are reasonable and properly required by the Company and that in the event that any such limitations are found to be
unreasonable by a court of competent jurisdiction, you will submit to the reduction of such limitations as the court shall find reasonable. If any of the restrictions in this paragraph 4 should for any reason whatsoever be declared invalid by a
court of competent jurisdiction, the validity or enforceability of the remainder of this Agreement will not be adversely affected thereby. You acknowledge that your services to the Company have been of a unique character which give them a special
value to the Company. You further acknowledge that you shall receive consideration under this letter agreement which, in part, specifically relates to the restrictions to which you have agreed in this paragraph 4. You further recognize that any
violation of the restrictions in this paragraph 4 may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law and that such violation may result in irreparable and continuing harm to
the Company. Accordingly, you agree that, in addition to any other remedy which the Company may have at law or in equity, the Company shall be entitled to injunctive relief to restrain any violation by you of the restrictions in this paragraph 4.

 Marie J. Toulantis 
 September 30, 2008 
  Page
 3
 of 5 
  

 5. Indemnification. You will be indemnified by the Company, as an officer and director of the
Company and its affiliates, against all third-party and stockholder-derivative actions, suits, claims, legal proceedings and the like to the fullest extent permitted by law, including, without limitation, advancement of expenses, partial
indemnification, indemnification following the termination of this Agreement, indemnification of your estate and similar matters. If necessary, you will be provided with separate counsel at the Company’s expense. 
 6. Employment Agreement. Your Employment Agreement with the Company is hereby terminated as of the Resignation Date and neither you nor the
Company shall have any rights or obligations thereunder. 
 7. Taxes. The Company may withhold from any and all amounts payable under
this Agreement such Federal, state, local and any other applicable taxes as may be required to be withheld pursuant to any applicable law or regulation. The Company has not made any representations regarding, nor indemnified you with respect to, any
tax liability as may be imposed on you in connection with any payments or benefits hereunder, and you shall be liable for all taxes, including, without limitation, taxes under Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”), other than the Company’s share of applicable employment taxes, associated therewith. 
 8. Suspension of
Benefits. Each payment under this Agreement shall be considered a separate payment for purposes of Code Section 409A. Notwithstanding anything herein to the contrary, unless it is determined you are not a specified employee within
the meaning of Code Section 409A, for purposes of any payment hereunder, all payment(s) other than those which are due and payable before March 15, 2009, shall be made or begin, as applicable, on the first payroll date which is more than
six months following the date of separation from service, to the extent required to avoid any adverse tax consequences under Code Section 409A. 
 9. General Release. Within 21 days following the date hereof, you shall execute and deliver to the Company the General Release and Waiver in the form attached hereto (the “Release”). All payments and
benefits to be made to or received by you hereunder shall permanently cease to be made and owed to you by the Company in the event either (a) you do not execute and deliver the Release to the Company within said 21-day period or (b) you
thereafter revoke the Release during the Revocation Period referred to therein. All payments and benefits that would have been otherwise due prior to the expiration of the Revocation Period shall be due upon the expiration of the Revocation Period
provided you do not revoke the Release. 

 Marie J. Toulantis 
 September 30, 2008 
  Page
 4
 of 5 
  

 10. Miscellaneous. 
 10.1. Entire Agreement. This Agreement constitutes the entire agreement between you and the Company and any of its affiliates with
respect to the subject matter hereof and supersedes all prior agreements, understandings and arrangements, oral or written, between you and the Company or any of its affiliates with respect to the subject matter hereof, including without limitation
your Employment Agreement. 
 10.2. Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall be
binding upon you and the Company and our respective heirs, legal representatives, successors and assigns. Without limitation of the foregoing, this Agreement shall be binding upon all successors and assigns of the Company, whether by merger, stock
purchase or asset acquisition, and any such successor shall assume all obligations of the Company hereunder. 
 10.3.
Amendments and Waivers. This Agreement may not be amended or modified except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Either party may, by an
instrument in writing, waive compliance by the other party with any term or provision of this Agreement to be performed or complied with by such other party. 
 10.4. Assignment. Neither this Agreement nor any rights or obligations which either party may have by reason of this Agreement
shall be assignable by either party without the prior written consent of the other party. 
 10.5. Notices. Any notice
which may or must be given under this Agreement shall be in writing and shall be personally delivered or sent by certified or registered mail, postage prepaid, or reputable overnight courier, addressed to you or the Company, as the case may be, at
the address set forth on the first page hereof, or to such other address as you or the Company, as the case may be, may designate in writing in accordance with the provisions of this paragraph. 
 10.6. Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and
are not deemed to be a part of this Agreement or to affect the meaning and interpretation of this Agreement. 
 10.7.
Governing Law. This Agreement shall be construed (both as to validity and performance) and enforced in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed wholly within the State
of New York. 

 Marie J. Toulantis 
 September 30, 2008 
  Page
 5
 of 5 
  

 10.8. Counterparts. This Agreement may be signed in counterparts, which
together shall constitute one and the same agreement. 
 If the foregoing is in accordance with your understanding, please sign and return
the enclosed copy of this letter agreement. 
  

			
	BARNESANDNOBLE.COM LLC
	By:	 	 BARNES & NOBLE
 BOOKSELLERS, INC.,
manager

		
	By:	 	

	Name:	 	Joseph J. Lombardi
	Title:	 	CFO

  

	
	ACCEPTED AND AGREED TO:
	
	

	Marie J. Toulantis

 GENERAL RELEASE AND WAIVER 
 1. Marie Toulantis (“Employee”) hereby acknowledges and agrees that Employee’s employment with barnesandnoble.com llc (the
“Company”) terminated on August 19, 2008 (the “Termination Date”). 
 2. Employee hereby agrees that after the
delivery to the Company of a signed original of this General Release and Waiver (“Release”), Employee will accept from the Company and on behalf of the Company and each Releasee (as defined herein), the payments and benefits set forth in
paragraphs 2 and 3 of the accompanying letter agreement dated as of September 30, 2008 between Employee and the Company (such letter referred to herein as the “September 2008 Letter Agreement” and such payments and benefits
collectively referred to herein as the “Separation Benefit”). Employee acknowledges and agrees that the Separation Benefit is adequate consideration for all the terms of the September 2008 Letter Agreement and this Release, and any
monetary or other benefits which, prior to the execution of this Release, Employee may have earned or accrued or to which Employee may have been entitled, have been paid or such payments or benefits have been released, waived or settled by Releasor
pursuant to this Release. 
 3. THIS PARAGRAPH PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING AND POTENTIAL CLAIMS YOU MAY HAVE
AGAINST EVERY PERSON AND ENTITY INCLUDED WITHIN THE DESCRIPTION BELOW OF “RELEASEE.” BEFORE YOU SIGN THIS RELEASE, YOU MUST READ THIS PARAGRAPH CAREFULLY, AND MAKE SURE THAT YOU UNDERSTAND IT FULLY. 
 In consideration of Employee’s receipt and acceptance of the Separation Benefit from the Company and on behalf of the Company and each Releasee (as
defined below), Employee, on Employee’s behalf and on behalf of Employee’s heirs, executors, administrators, successors and assigns (collectively, “Releasor”), hereby irrevocably, unconditionally and generally releases the
Company, Barnes & Noble, Inc., their respective current and former officers, directors, shareholders, trustees, parents, members, managers, affiliates, subsidiaries, branches, divisions, agents, attorneys and employees, and the current and
former officers, directors, shareholders, agents, attorneys and employees of any such parent, affiliate, subsidiary, branch or division of the Company and Barnes & Noble, Inc. and the heirs, executors, administrators, receivers, successors
and assigns of all of the foregoing (collectively, “Releasee”), from or in connection with, and hereby waives and/or settles, except as may otherwise be stated herein, any and all actions, causes of action, suits, debts, dues, sums of
money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever and which Releasor ever had, now has or hereafter can, shall or may have as of
the date of this Release, including, without limitation, any rights and/or claims arising under any contract, express or implied, written or oral; for wrongful dismissal or termination of employment; and arising under any applicable foreign,
federal, state, local or other statutes, orders, laws, ordinances, regulations or the like, or case law, that relate to employment or employment practices and/or, specifically, that prohibit discrimination based upon age, race, religion, sex,
national origin, disability or any other unlawful bases, including without limitation, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as amended, the Age Discrimination in
Employment Act of 1967, as amended, the Americans with Disabilities Act of 1990, as amended, the Family Medical Leave Act of 1993, as amended, the Employee Retirement Income Security Act of 1990, as amended, the Fair Labor Standards Act, as amended,
the Vietnam Era Veterans’ Readjustment Assistance Act, as amended, the Equal Pay Act, as amended, the Worker Adjustment and Retraining Notification Act, as amended, and any similar applicable statutes, 

 
orders, laws, ordinances, regulations or the like, or case law, of the State of New York and any State in which any Releasee is subject to jurisdiction, or
any political subdivision or any political subdivision thereof, including without limitation, the New York State Executive Law and the New York City Administrative Code, and all applicable rules and regulations promulgated pursuant to or concerning
any of the foregoing statutes, orders, laws, ordinances, regulations or the like. 
 4. Employee represents and warrants that Employee has
not filed or commenced any complaints, claims, actions or proceedings of any kind against any Releasee with any federal, state or local court or any administrative, regulatory or arbitration agency or body. Employee hereby waives any right to, and
agrees not to, seek reinstatement or employment of any kind with any Releasee and, without waiver by any Releasee of the foregoing, the existence of this Release shall be a valid, non-discriminatory basis for rejecting any such application or, in
the event Employee obtains such employment, to terminate such employment. 
 5. By executing this Release, Releasor acknowledges that
(a) Employee has been advised by the Company to consult with an attorney before executing this Release; (b) Employee was provided adequate time (i.e, twenty-one (21) days) to review this Release and to consider whether to sign the
Release and (c) Employee has been advised that Employee has seven (7) days following execution to revoke the Release (“Revocation Period”). Notwithstanding anything to the contrary contained herein or in the September 2008 Letter
Agreement, this Release will not be effective or enforceable, and the Separation Benefit is not payable and shall not be delivered or paid by the Company, until the Revocation Period has expired and provided that Employee has not revoked the
Release. Employee agrees that any revocation shall be made in writing and delivered to John Heaney, Vice President, Human Resources, Barnes&Noble.com, 76 Ninth Avenue, NY, NY 10011. Employee acknowledges that revocation of the Release shall
operate as a revocation of the September 2008 Letter Agreement. 
 6. This Release and Separation Benefit are not intended to be, shall
not be construed as and are not an admission or concession by any Releasee of any wrongdoing or illegal or actionable acts or omissions. Employee, as and on behalf of Releasor, hereby represents and agrees that Employee shall keep confidential and
not disclose orally or in writing, to any person, except as may be required by law, any and all information concerning the existence or terms of this Release and the amount of any payments made hereunder. Employee further agrees that in
consideration of the Separation Benefit, and except as shall be required by law, (a) Employee shall keep confidential and not disclose orally or in writing directly or indirectly to any person (except Employee’s immediate family, attorneys
and accountant), any and all information concerning any facts, claims or assertions relating or referring to any experiences of Employee or treatment Employee received by or on behalf of any Releasee through the date of this Release, and
(b) Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee. 
 7. Employee hereby acknowledges that during Employee’s employment Employee may have acquired certain proprietary, private and/or otherwise
non-public information, whether or not created or maintained in written form, which constitutes, relates or refers to any and all of the following: financial data, strategic business plans, product development information (or other proprietary
product data), website development plans, marketing plans, processes, inventions, devices and all other non-public, proprietary or confidential information of, concerning or provided by or on behalf of the Company and any Releasee (collectively,
“Confidential Information,”). All of the foregoing is merely illustrative and Confidential Information is not limited to those illustrations. Employee hereby represents and agrees that 

  

 2 

 
upon execution of this Release (a) Employee has returned to the Company, and has not retained any copies of, all documents, records or materials of any
kind, whether written or electronically created or stored, which contain, relate to or refer to any Confidential Information (“Confidential Materials”); (b) Employee has not disclosed any Confidential Information or Confidential
Materials to any person or entity without the express authorization of an authorized officer of the Company; and (c) in consideration of the Company’s agreement to deliver the Separation Benefit pursuant to the terms of this Release,
Employee and/or any Releasor shall not disclose any Confidential Information or Confidential Materials, in any manner directly or indirectly, except as shall be required by law. Employee further acknowledges and agree that the results and proceeds
of any work performed by Employee while employed by the Company (“Works of Authorship”) are all specially ordered or commissioned by the Company as a “work made for hire” (as that term is defined in the United States Copyright
Act) and that the Company shall own all right, title and interest thereto. In addition to the foregoing, Employee hereby assigns and transfers to the Company Employee’s entire right, title and interest in and to all inventions, ideas,
improvements, discoveries, trade secrets, processes, data, programs, knowledge, know-how, designs, techniques, formulas, test data, computer code, and other designs and creations contained in the Works of Authorship, whether or not patentable,
copyrightable, or otherwise protected by law, and whether or not reduced to practice, made, learned or conceived by Employee, which were created in connection with, result from, or are suggested by any task assigned to Employee. 
 If Employee is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential Information, Employee will promptly notify the Company of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective
order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure, or, in the discretion of the Company to waive compliance
with the provisions of this Release. Employee will use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a
protective order or the receipt of a waiver hereunder, Employee is compelled to disclose the Confidential Information or else stand liable for contempt or suffer other sanction, censure or penalty, Employee will disclose only so much of the
Confidential Information to the party compelling disclosure as she believes in good faith on the basis of advice of counsel is required by law and Employee shall give the Company prior notice of the Confidential Information she believes she is
required to disclose. 
 8. Employee represents that Employee has returned to the Company, or that Employee shall do so prior to delivery of
the Separation Benefit, all property of the Company which is or has been in Employee’s possession, custody, or control, including but not limited to computers and other equipment, company credit cards, identification cards, and access cards and
keys. 
 9. Employee shall provide such reasonable cooperation the Company on behalf of itself or any Releasee, may request in connection
with any pending or future lawsuit, arbitration, or proceeding between the Company and/or any Releasee and any third party; any pending or future regulatory or governmental inquiry or investigation concerning the Company and/or any Releasee; and any
other legal, internal, or business matters of or concerning the Company and/or any Releasee. Such cooperation shall include, without limitation, meeting with and providing information the Company, any Releasee and/or its, their respective attorneys,
auditors, or other representatives as reasonably requested by the Company. 
 10. The covenants, representations and acknowledgments made by
Employee in this Release shall survive the execution of the Release and the delivery of the Separation Benefit, and this Release shall inure to the benefit of each Releasee, and the successors and assigns of each of them. Releasees shall be excused
and released from any obligation to make payment of the Separation Benefit, and 

  

 3 

 
Employee shall be obligated to return to the Company the Separation Benefit, in the event that the Employee is found to have made a material misstatement in
any term, condition, covenant, representation or acknowledgment in this Release, or Employee is found to have committed or commits a material breach of any term, condition or covenant in this Release. 
 11. This Release and the September 2008 Letter Agreement constitute the sole and complete understanding and agreement between the parties with respect to
the matters set forth herein and there are no other agreements or understandings, whether written or oral and whether made contemporaneously or otherwise (other than as specifically referred to in the September 2008 Letter Agreement.) No term,
condition, covenant, representation or acknowledgment contained in this Release may be amended unless in a writing signed by both parties. If any section of this Release is determined to be void, voidable or unenforceable, it shall have no effect on
the remainder of the Release which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions maximum effect permitted by applicable law. 
 12. Employee acknowledges if there is a breach or threatened breach of the provisions of this Release, the Company will have no adequate remedy in money
or damages and accordingly shall be entitled to seek equitable relief, including without limitation, injunction and specific performance; Employee hereby waives any requirements for security or posting of any bond in connection with such relief. No
specification in this Release of any particular remedy shall be construed as a waiver or prohibition of any other remedies in the event of a breach or threatened breach of this Release. 
 13. This Release shall in all respects be subject to, governed by and enforced and construed pursuant to and in accordance with the laws of the State of
New York without regard to and excluding its choice of law rules. Employee hereby consents to personal jurisdiction in any action brought in any court, federal or state, within the City of New York having subject matter jurisdiction arising under
this Release. 
 14. Employee agrees and acknowledges that (a) Employee has had an adequate opportunity to review this Release and all
of its terms; (b) Employee understands all of the terms of this Release, which are fair, reasonable and are not the result of any fraud, duress, coercion, pressure or undue influence exercised by or on behalf of any Releasee; and
(c) Employee has agreed to and/or entered into this Release and all of the terms hereof, knowingly, freely and voluntarily. 
  

									
	Signature:	 	

	 		 	 

		 	Marie Toulantis	 		 		 	

  

 4exhibit_4-14.htm

    
      

    

    Exhibit
4.14

     

    CORPORATE
SUPPORT AGREEMENT

    

    

    THIS CORPORATE SUPPORT AGREEMENT
made effective November 1st,  2006.

     

    BETWEEN:

    

    SWEETWATER CAPITAL CORP. of
1000-789 West Pender Street, Vancouver, British Columbia, Canada, V6C
1H2

    

     

    (the
"Service Provider")

    OF THE
FIRST PART

    AND:

    

    VALCENT PRODUCTS INC., of
1010-789 West Pender Street, Vancouver, British Columbia, Canada, V6C
1H2;

    

    (the
"Client")

    OF THE
SECOND PART

    WHEREAS:

     

    A.           The
Service Provider maintains office premises and corporate services in Vancouver,
British Columbia equipped specifically for the purpose of providing essential
corporate services and facilities to clients as more particularly described
herein;

    

    B.         
  The Client is a US Reporting Issuer having a address in Vancouver,
British Columbia in need of premises and services for the purpose of maintaining
it operations and corporate headquarters in the Province of British
Columbia;

    

    C.      
     The Service Provider has agreed to provide the
services to the client on the terms and conditions contained
herein:

    

    NOW THEREFORE this Agreement
witnesseth that in consideration of the premises and of the mutual covenants and
agreements hereinafter set out, the parties hereto covenant and agree as
follows:

    

    SECTION I -
INTERPRETATION

     

    1.01                         
Interpretation

     

    For all
purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:

    

    (a)            "this
Agreement" means this Agreement and all Schedules attached hereto:

    

    (b)            any
reference in this Agreement to a designated "Section", "Subsection",
"Schedule" or other subdivision refers to the designated Section, Subsection,
Schedule or other subdivision of this Agreement;

    

    (c)            the
words “herein” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular Section, Subsection or other
subdivision of the Agreement;

    

    (d)            any
reference to a statute included and, unless otherwise specified herein, is a
reference to such statute and to the regulations made pursuant thereto, with all
amendments made thereto and in force from time to time, and to any statute or
regulations that may be passed which has the effect of supplementing or
superseding such statue or such regulation; and

    

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

     

    (e)            words
importing the masculine gender include the feminine or neuter gender and words
in the singular include the plural, and vice versa.

    

    1.02                         
Headings

    

    The
headings of the Sections and Subsections of this Agreement are inserted for
convenience of reference only and shall not in any way affect the construction
or interpretation of this Agreement or of any part thereof.

    

    1.03                         
Governing
Law

    

    This
Agreement shall be governed by and construed in accordance with the laws of the
Province of British Columbia, Canada.

    

    1.04                         
Severability

    

    In the
event that any provision of this Agreement or any part thereof is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and
the remaining provisions shall be construed as if the invalid, illegal or
unenforceable provisions had been deleted from this Agreement.

    

    1.05                         
Currency

    

    All
references to dollars or funds herein mean lawful currency of the
Canada.

    

    SECTION
2
- SERVICES

    

    2.01          The
Service Provider agrees to provide a corporate address, with fully furnished
offices equipped with telephones, internet services, support services, board
room facilities, non-alcoholic refreshments, postage facilities, repairs and
maintenance to office equipment located in the premises and all incidental
services thereto to the Client as required by the Client in order for the Client
to be able to perform its corporate activities in Vancouver, British Columbia
commensurate with the needs of like corporations as if they had maintained their
own fully furnished and staffed premises for the same purposes.

    

    2.02          Upon
request and at the direction of the Client, the Service Provider further agrees
to provide personnel to the client to assist with the following services in the
premises:

     

    
      	 	i)	receptionist;
	 	 	 
	 	ii)	secretarial;
	 	 	 
	 	iii)	bookkeeping
      and accounting services;
	 	 	 
	 	iv)	corporate
      records clerks;
	 	 	 
	
               
      

            	
              vi)

            	
              qualified
      personnel to assist in the preparation of quarterly, interim and annual
      financial statements as required under SEC guidelines for independent
      review by outside auditors;

            

    

    

    
      	
               
      

            	
              vii)

            	
              qualified
      personnel to assist in arranging for timely disclosure of all material
      facts in the affairs of the Client;

            

    

    

    
      	
               
      

            	
              viii)

            	
              qualified
      personnel to assist in perusing and replying to all corporate inquiries
      and correspondence; and

            

    

    

    
      	
               
      

            	
              vii)

            	
              qualified
      personnel to draft disclosure documents for filing with the Securities and
      Exchange Commission in
      the USA and with the applicable securities commissions in Canada for
      review by independent outside legal counsel selected by the
      Client.

            

    

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    2.03          At
the request of the Client and/or for the Client's scrutiny and evaluation, the
Service Provider further agrees to provide the following services during the
term of this Agreement, :

    

    
      	
               
      

            	
              i)

            	
              reviewing
      the financial position of the Client and providing recommendations
      thereon;

            

    

     

    
      	
               
      

            	
              ii)

            	
              assisting
      in formulating plans and budgets from time to time for the
      Client;

            

    

     

    
      	
               
      

            	
              iii)

            	
              disseminating
      such information to persons in accordance with the marketing plan of the
      Client to encourage participation in the development of the
      Client;

            

    

    

    
      	
               
      

            	
              iv)

            	
              recommending
      and thereafter retaining the services of professionals as
      requested;

            

    

    

    
      	
               
      

            	
              v)

            	
              recommending
      on the basis of evaluations provided by professionals, suitable business
      opportunities for acquisition and
participation;

            

    

    

    
      	
               
      

            	
              vi)

            	
              establishing
      and maintaining suitable banking relations as
  requested;

            

    

    

    
      	
               
      

            	
              vii)

            	
              helping
      to ensure the maintenance of proper accounting records and compiling
      monthly statements of source and application of
    funds;

            

    

    
    

    

    
      	
               
      

            	
              viii)

            	
              arranging
      for the payment of all payables of the Client and/or any subsidiaries;
      and

            

    

    

    
      	
               
      

            	
              ix)

            	
              suggesting
      experienced personnel to assist the Client with advice on mergers and
      acquisitions, financings and investor support services as required by the
      Client with the assistance of outside professionals in order for
      management of the Client to be able to diligently pursue corporate
      opportunities.

            

    

    

    2.04                         
Terms of
Sublease

     

    The
Client acknowledges and accepts the terms and conditions of the Head Lease as
provided in Schedule A hereto between the Service Provider and the landlord for
the demised premises in which the Client will be located pursuant to this
agreement. Such terms and conditions will be binding on the Client as they may
relate to the Client unless otherwise agreed in writing by the Service
Provider.

     

    2.04                         
Term

    

    This
Agreement shall be for a period of 18 months commencing November 1, 2006 and
expiring April 30, 2008 unless extended thereafter on a month-to-month basis or
for an extended term in writing.

    

    2.05                         
Payment
for Services

    

    The
remuneration of the Service Provider for its services shall be the sum of
$15,000 per month plus GST at the prescribed rate payable in advance in equal
monthly installments on the first business day of each calendar month, the first
of such installments to be payable on the first day of November 1,
2006.

    

    SECTION 3 -
DISPUTES

    

     3.01         Any
dispute arising under this agreement shall be settled by arbitration pursuant to
applicable Arbitration Statutes in effect in the Province of British Columbia by
a single arbitrator if the parties hereto are able to agree on a single
arbitrator within thirty (30) days after written demand to arbitrate is given in
writing by one party to the other, and failing such agreement, by three
arbitrators, one to be appointed by the Client, one to be appointed by the
Service Provider, and the third to be appointed by such two arbitrators, and the
decision of the single arbitrator or a majority of the arbitrators if three are
appointed, shall be final and binding upon the parties hereto, and such decision
shall include a direction as to the costs of the arbitration.

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    SECTION 4 - EARLY
TERMINATION

     

    4.01         
This Agreement is subject to early termination by the Service Provider on ninety
(90) days written notice.

     

    4.02          This
Agreement is subject to early termination by the Client on sixty (60) days
written notice. In the event the Client terminates this Agreement, the Client
shall be liable for the payment of monthly service fees for an additional period
of six (6) months after the date notice is given which amount is the agreed upon
amount of liquidated damages the Service Provider will suffer or incur as a
result of the early termination of this Agreement.

     

    SECTION 5 - SERVICE
PROVIDER'S COVENANTS

     

     5.01         Upon
termination of this Agreement for any reason, or whenever requested by the
Service Provider, the Client shall deliver to the Service Provider all property
belonging to the Service Provider, including, without limitation: any keys,
security cards, passwords, devices or other property which may have come into
the Client's possession during the course of the Agreement;

     

     5.02         The
Service Provider covenants with the Client to provide access to the business
premises during normal business hours during the Term and after normal business
hours provided access by the Client shall only be made in accordance with the
guidelines from time to time imposed on tenants in the building leased by the
Service Provider;

     

    5.03          The
Service Provider shall maintain the office premises in good repair and properly
maintained with acceptable janitorial services;

    

    5.03         The
Service Provider, its employees, agents and contractors will keep confidential
and shall not use or disclose any information (other than information which is
readily ascertainable from trade sources or public information) obtained from
the Client.

     

    5.04          The
Service Provider shall throughout the Term keep the premises insured for loss
and damage as required by the Head Lease in Schedule A section 10 Tenant's
Insurance and, at the option of the Client, will add the Client to this coverage
as an additional insured in respect of all applicable insurances. Furthermore
the Service Provider will waive all rights of subrogation against the Client in
the event of loss or damage to property insured per Tenant's Insurance 10.02 (b)
of the Head Lease. The Service Provider shall pay when due all premiums
necessary for the above purpose provided that the Service Provider's obligation
under this covenant shall immediately cease if the insurance covenanted for
shall be rendered void by any act or default of the Client;

    

    5.05          The
Service Provider will endeavor to ensure that any agents, contractors or
subcontractors engaged by the Service Provider, directly or at the request of
the Client, maintain worker's compensation coverage, Commercial General
Liability Insurance in an amount of not less than $1 million and any other forms
of insurance that may reasonably required by the Client;

    

    5.05          The
Service Provider Shall if the premises are damaged by fire reinstate the
premises at his sole expense, with all reasonable speed; and

    

    5.06          If
the premises or any part of them are damaged by fire during the Term of this
lease, with the result that they are rendered unfit for habitation, then the
fees reserved by this Agreement or a fair proportion thereof in accordance with
the nature and extent of the damage shall be suspended until the leased premises
are again fit for habitation.

    

    Limitations on
Authority. Without the express written consent of the Client, the Service
Provider shall not have any authority to enter into, execute or deliver any
contract, agreement or other instrument in the name or on behalf of
the Client, and nothing herein contained shall authorize or empower the Service
Provider to assume or create any obligation, liability or responsibility
whatsoever, express or implied, on behalf of or in the name of the Client, or to
bind the Client in any manner unless at the written direction of an authorized
representative employee or representative of the Client.

    
 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Indemnity

     

    The
Service Provider and the Client mutually agree to indemnify and hold harmless
the other party, its directors, officers, employees, agents and contractors for
and against all actions, suits, demands, claims and costs of defending such
claims unless arising from the gross negligence or willful misconduct of the
Client.

    

    SECTION 6
- MISCELLANEOUS

    

    6.01               
          Amendment
or Termination

     

    No
amendment or termination of this Agreement shall be valid unless it is in
writing and executed by the parties hereto.

    

    6.02                
         Further
Assurances

     

    The
parties hereto shall execute all such further documents and give all such
further assurances as may be required to carry out the purpose and intent of
this Agreement.

    

    6.03                      
   Personal
Agreement

     

    This
Agreement is personal to the parties hereto and shall not be assigned except by
operation of law. If this Agreement is assigned by operation of law, it shall
enure to the benefit of and be binding upon such assigns. This agreement shall
enure to the benefit of and be binding upon the parties hereto.

    

    6.04                         
Notices

    

    All
notices and other communications required or permitted to be given hereunder
shall be in writing and shall be delivered to the party for whom it is intended
at the address for such party as set forth in this Agreement, or to such other
address as either party may provide in writing to the other pursuant to the
provisions in this Subsection or may be sent by telecopy or by means of
facsimile transmission. Any notice shall be deemed to have been received by the
party to whom it is delivered, when delivered, and if transmitted by telecopy or
facsimile transmission, upon transmission.

     

    6.05                         
Entire
Agreement

    

    This
Agreement contains the entire understanding between the parties and supersedes
any prior understandings and agreements between them respecting the subject
matters hereof. There are no other representations, agreements, arrangements, or
understandings, oral or written, between and among the parties hereto or any of
them, relating to the subject matter of this Agreement.

    

    IN WITNESS WHEREOF, the
parties hereto have executed these presents the day and year first written
above.

     

    
      
        	Signed
      by the duly authorized officers of 	)	 	 	 
	SWEETWATER CAPITAL
      CORP. 	)	 	 	 
	in
      the presence of :     	)	 	 	 
	 	 	)	 	 	 
	Per:	
                /s/ 
      Monita Faris

              	)	 	
                 

              	 
	 	 	 	 	 	 
	 	
                 

              	)	 	
                 

              	 
	Per:	
                /s/ 
      Robert Baker

              	)	 	
                 

              	 

      

    

    

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      	SIGNED,
      SEALED AND DELIVERED  	)	 	 	 
	By
      VALCENT PRODUCTS
      INC. in   	)	 	 	 
	the
      presence of: 	)	 	 	 
	 	 	)	 	 	 
	/s/ 
      Robert Baker	)	 	
              /s/ 
      Grant Atkins

            	 
	Witness	)	 	(Authorized
      Signatory)	 
	 	 	 	 	 
	885
      Pyrford Rd.	)	 	 	 
	Address	)	 	 	 
	 	 	 	 	 
	V7S
      2A2	)	 	 	 
	Postal
      Code	)	 	 	 

    

    

     

     

     

    
 

    Schedule
A

     

     

    Head
Lease Provisions

    
 

     

     

     

     

     

     

     

    
      6

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