Document:

ex101.htm

Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of August 11, 2010 and effective as of June 30, 2010, is made by and between Pollex, Inc., a Nevada corporation (“Pollex”), its wholly-owned subsidiary, Joyon Entertainment, Inc., a Delaware Corporation (“Joyon”) (collectively, the “Seller”), and Joytoto Co., Ltd. (the “Buyer”).

 

RECITALS

 

A.           Pollex owns all of the issued and outstanding shares of common stock of Joyon, which owns all of the issued and outstanding shares of common stock (the “Shares”) of Joytoto America, Inc., a California corporation (the “Company”), which Shares constitute, as of the date hereof, all of the issued and outstanding capital stock of the Company.

 

B.           Buyer hold 166,667 (post- reverse split, 5,000,000 pre-reverse split) shares of common stock, $0.001 par value per share, of Pollex (the “Purchase Price Shares”), and the Buyer agreed to transfer such shares back to Pollex for cancellation (the “Repurchase”).

 

C.           In connection with the Repurchase, the Buyer wishes to acquire from Seller, and Seller wishes to transfer to Buyer, the Shares, upon the terms and subject to the conditions set forth herein.

 

Accordingly, the parties hereto agree as follows:

 

1.           Purchase and Sale of Stock.

 

(a)           Purchased Shares. Subject to the terms and conditions provided below, Seller shall sell and transfer to Buyer and Buyer shall purchase from Seller, on the Closing Date (as defined in Section 1(c)), all of the Shares.

 

(b)           Purchase Price.  The purchase price for the Shares shall be the transfer and delivery by Buyer to Seller of the Purchase Price Shares, deliverable as provided in Section 2(b).

 

(c)           Closing. The closing of the transactions contemplated in this Agreement (the “Closing”) shall take place as soon as practicable following the execution of this Agreement.  The date on which the Closing occurs shall be referred to herein as the Closing Date (the “Closing Date”).

 

2.           Closing.

 

(a)           Transfer of Shares. At the Closing, Seller shall deliver to Buyer certificates representing the Shares, duly endorsed to Buyer or as directed by Buyer, which delivery shall vest Buyer with good and marketable title to all of the issued and outstanding shares of capital stock of the Company, free and clear of all liens and encumbrances.

 

(b)  Payment of Purchase Price. At the Closing, Buyer shall deliver to Seller a certificate or certificates representing the Purchase Price Shares duly endorsed to Seller, which delivery shall vest Seller with good and marketable title to the Purchase Price Shares, free and clear of all liens and encumbrances.

 

3.           Representations and Warranties of Seller. Seller, jointly and serverally, represents and warrants to Buyer as of the date hereof as follows:

 

(a)           Corporate Authorization; Enforceability. The execution, delivery and performance by Seller of this Agreement is within the corporate powers and has been, duly authorized by all necessary corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller and constitutes the valid and binding agreement of Seller, enforceable against Seller in accordance with its terms, except to the extent that its enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

 

(b)           Governmental Authorization. The execution, delivery and performance by Seller of this Agreement requires no consent, approval, Order, authorization or action by or in respect of, or filing with, any Governmental Authority.

 

(c)           Non-Contravention; Consents. The execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby do not (i) violate the certificate of incorporation or bylaws of Seller or (ii) violate any applicable Law or Order.

 

(d)           Capitalization. As of the date hereof, Seller owns the Shares, which shares represent 100% of the authorized, issued and outstanding capital stock of the Company. The Shares are duly authorized, validly issued, fully-paid, non-assessable and free and clear of any Liens.

 

4.           Representations and Warranties of Buyer. Buyer represents and warrants to Seller as of the date hereof as follows:

 

(a)           Enforceability. The execution, delivery and performance by Buyer of this Agreement are within Buyer’s powers. This Agreement has been duly executed and delivered by Buyer and constitutes the valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, except to the extent that its enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles.

 

(b)           Governmental Authorization. The execution, delivery and performance by Buyer of this Agreement require no consent, approval, Order, authorization or action by or in respect of, or filing with, any Governmental Authority.

 

 

 

  

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(c)           Non-Contravention; Consents. The execution, delivery and performance by Buyer of this Agreement, and the consummation of the transactions contemplated hereby do not violate any applicable Law or Order.

 

(d)           Purchase for Investment.  Buyer is financially able to bear the economic risks of acquiring an interest in the Company and the other transactions contemplated hereby, and have no need for liquidity in this investment. Buyer has such knowledge and experience in financial and business matters in general, and with respect to businesses of a nature similar to the business of the Company, so as to be capable of evaluating the merits and risks of, and making an informed business decision with regard to, the acquisition of the Shares. Buyer is acquiring the Shares solely for their own account and not with a view to or for resale in connection with any distribution or public offering thereof, within the meaning of any applicable securities laws and regulations, unless such distribution or offering is registered under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration is available. Buyer has (i) received all the information they have deemed necessary to make an informed investment decision with respect to the acquisition of the Shares, (ii) had an opportunity to make such investigation as they have desired pertaining to the Company and the acquisition of an interest therein, and to verify the information which is, and has been, made available to them and (iii) had the opportunity to ask questions of Seller concerning the Company. Buyer has received no public solicitation or advertisement with respect to the offer or sale of the Shares. Buyer realizes that the Shares are “restricted securities” as that term is defined in Rule 144 promulgated by the Securities and Exchange Commission under the Securities Act, the resale of the Shares is restricted by federal and state securities laws and, accordingly, the Shares must be held indefinitely unless their resale is subsequently registered under the Securities Act or an exemption from such registration is available for their resale. Buyer understands that any resale of the Shares by them must be registered under the Securities Act (and any applicable state securities law) or be effected in circumstances that, in the opinion of counsel for the Company at the time, create an exemption or otherwise do not require registration under the Securities Act (or applicable state securities laws). Buyer acknowledges and consent that certificates now or hereafter issued for the Shares will bear a legend substantially as follows:

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND QUALIFICATION UNDER THE STATE ACTS OR PURSUANT TO EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE SECURITIES ACT, THE EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT AND RULE 144 THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER OF THESE SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO THE AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES LAWS.

 

Buyer understands that the Shares are being sold to them pursuant to the exemption from registration contained in Section 4(1) of the Securities Act and that Seller is relying upon the representations made herein as one of the bases for claiming the Section 4(1) exemption.

 

(e)           Liabilities.  Following the Closing, Seller will have no debts, liabilities or obligations relating to the Company or its business or activities, whether before or after the Closing, and there are no outstanding guaranties, performance or payment bonds, letters of credit or other contingent contractual obligations that have been undertaken by Seller directly or indirectly in relation to the Company or its business and that may survive the Closing.

 

(f)           Title to Purchase Price Shares.  Buyer is the sole record and beneficial owners of the Purchase Price Shares. At Closing, Buyer will have good and marketable title to the Purchase Price Shares, which Purchase Price Shares are, and at the Closing will be, free and clear of all options, warrants, pledges, claims, liens and encumbrances, and any restrictions or limitations prohibiting or restricting transfer to Seller, except for restrictions on transfer as contemplated by applicable securities laws.

 

5.           Indemnification and Release.

 

(a)           Indemnification. Buyer covenants and agrees to indemnify, defend, protect and hold harmless Seller, and its officers, directors, employees, stockholders, agents, representatives and affiliates (collectively, together with Seller, the “Seller Indemnified Parties”) at all times from and after the date of this Agreement from and against all losses, liabilities, damages, claims, actions, suits, proceedings, demands, assessments, adjustments, costs and expenses (including specifically, but without limitation, reasonable attorneys’ fees and expenses of investigation), whether or not involving a third party claim and regardless of any negligence of any Seller Indemnified Party (collectively, “Losses”), incurred by any Seller Indemnified Party as a result of or arising from (i) any breach of the representations and warranties of Buyer set forth herein or in certificates delivered in connection herewith, (ii) any breach or nonfulfillment of any covenant or agreement on the part of Buyer under this Agreement, (iii) any debt, liability or obligation of the Company, whether incurred or arising prior to the date hereof or after, (iv) the conduct and operations of the business of the Company whether before or after the Closing, (v) claims asserted against the Company whether arising before or after the Closing, or (vi) any federal or state income tax payable by Seller and attributable to the transaction contemplated by this Agreement.

 

 

 

  

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(b)           Third Party Claims.

 

(i)           If any claim or liability (a “Third-Party Claim”) should be asserted against any of the Seller Indemnified Parties (the “Indemnitee”) by a third party after the Closing for which Buyer has an indemnification obligation under the terms of Section 5(a), then the Indemnitee shall notify Buyer (the “Indemnitor”) within 20 days after the Third-Party Claim is asserted by a third party (said notification being referred to as a “Claim Notice”) and give the Indemnitor a reasonable opportunity to take part in any examination of the books and records of the Indemnitee relating to such Third-Party Claim and to assume the defense of such Third-Party Claim and in connection therewith and to conduct any proceedings or negotiations relating thereto and necessary or appropriate to defend the Indemnitee and/or settle the Third-Party Claim. The expenses (including reasonable attorneys’ fees) of all negotiations, proceedings, contests, lawsuits or settlements with respect to any Third-Party Claim shall be borne by the Indemnitor. If the Indemnitor agrees to assume the defense of any Third-Party Claim in writing within 20 days after the Claim Notice of such Third-Party Claim has been delivered, through counsel reasonably satisfactory to Indemnitee, then the Indemnitor shall be entitled to control the conduct of such defense, and shall be responsible for any expenses of the Indemnitee in connection with the defense of such Third-Party Claim so long as the Indemnitor continues such defense until the final resolution of such Third-Party Claim. The Indemnitor shall be responsible for paying all settlements made or judgments entered with respect to any Third-Party Claim the defense of which has been assumed by the Indemnitor. Except as provided in subsection (ii) below, both the Indemnitor and the Indemnitee must approve any settlement of a Third-Party Claim. A failure by the Indemnitee to timely give the Claim Notice shall not excuse Indemnitor from any indemnification liability except only to the extent that the Indemnitor is materially and adversely prejudiced by such failure.

 

(ii)           If the Indemnitor shall not agree to assume the defense of any Third-Party Claim in writing within 20 days after the Claim Notice of such Third-Party Claim has been delivered, or shall fail to continue such defense until the final resolution of such Third-Party Claim, then the Indemnitee may defend against such Third-Party Claim in such manner as it may deem appropriate and the Indemnitee may settle such Third-Party Claim, in its sole discretion, on such terms as it may deem appropriate. The Indemnitor shall promptly reimburse the Indemnitee for the amount of all settlement payments and expenses, legal and otherwise, incurred by the Indemnitee in connection with the defense or settlement of such Third-Party Claim. If no settlement of such Third-Party Claim is made, then the Indemnitor shall satisfy any judgment rendered with respect to such Third-Party Claim before the Indemnitee is required to do so, and pay all expenses, legal or otherwise, incurred by the Indemnitee in the defense against such Third-Party Claim.

 

(c)           Non-Third-Party Claims. Upon discovery of any claim for which Buyer has an indemnification obligation under the terms of this Section 5 which does not involve a claim by a third party against the Indemnitee, the Indemnitee shall give prompt notice to Buyer of such claim and, in any case, shall give Buyer such notice within 30 days of such discovery. A failure by Indemnitee to timely give the foregoing notice to Buyer shall not excuse Buyer from any indemnification liability except to the extent that Buyer is materially and adversely prejudiced by such failure.

 

(d)           Release.  Buyer, on behalf of itself and its Related Parties, hereby releases and forever discharges Seller and its individual, joint or mutual, past and present representatives, Affiliates, officers, directors, employees, agents, attorneys, stockholders, controlling persons, subsidiaries, successors and assigns (individually, a “Releasee” and collectively, “Releasees”) from any and all claims, demands, proceedings, causes of action, orders, obligations, contracts, agreements, debts and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, which Buyer or any of its Related Parties now have or have ever had against any Releasee. Buyer hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, or commencing, instituting or causing to be commenced, any proceeding of any kind against any Releasee, based upon any matter released hereby. “Related Parties” shall mean, with respect to Buyer, (i) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with Buyer, (ii) any Person in which Buyer hold a Material Interest or (iii) any Person with respect to which any Buyer serves as a general partner or a trustee (or in a similar capacity). For purposes of this definition, “Material Interest” shall mean direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of voting securities or other voting interests representing at least ten percent (10%) of the outstanding voting power of a Person or equity securities or other equity interests representing at least ten percent (10%) of the outstanding equity securities or equity interests in a Person.

 

6.           Definitions. As used in this Agreement:

 

(a)           “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with the first Person. For the purposes of this definition, “Control,” when used with respect to any Person, means the possession, directly or indirectly, of the power to (i) vote 10% or more of the securities having ordinary voting power for the election of directors (or comparable positions) of such Person or (ii) direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing;

 

(b)           “Governmental Authority” means any domestic or foreign governmental or regulatory authority;

 

(c)           “Law” means any federal, state or local statute, law, rule, regulation, ordinance, code, Permit, license, policy or rule of common law;

 

(d)           “Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset. For purposes of this Agreement, a Person will be deemed to own, subject to a Lien, any property or asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset;

 

(e)           “Order” means any judgment, injunction, judicial or administrative order or decree;

 

(f)           “Permit” means any government or regulatory license, authorization, permit, franchise, consent or approval; and

 

(g)           “Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

 

 

  

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7.           Miscellaneous.

 

(a)           Counterparts. This Agreement may be signed in any number of counterparts, each of which will be deemed an original but all of which together shall constitute one and the same instrument.

 

(b)           Amendments and Waivers.

 

(i)           Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.

 

(ii)           No failure or delay by any party in exercising any right, power or privilege hereunder will operate as a waiver thereof nor will 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 will be cumulative and not exclusive of any rights or remedies provided by Law.

 

(c)           Successors and Assigns. The provisions of this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer (including by operation of Law) any of its rights or obligations under this Agreement without the consent of each other party hereto.

 

(d)           No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted successors and assigns and nothing herein expressed or implied will give or be construed to give to any Person, other than the parties hereto, those referenced in Section 5 above, and such permitted successors and assigns, any legal or equitable rights hereunder.

 

(e)           Governing Law. This Agreement will be governed by, and construed in accordance with, the internal substantive law of the State of New York.

 

(f)           Headings. The headings in this Agreement are for convenience of reference only and will not control or affect the meaning or construction of any provisions hereof.

 

(g)           Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter of this Agreement. This Agreement supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof of this Agreement.

 

(h)           Severability. If any provision of this Agreement or the application of any such provision to any Person or circumstance is held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, the remainder of the provisions of this Agreement (or the application of such provision in other jurisdictions or to Persons or circumstances other than those to which it was held invalid, illegal or unenforceable) will in no way be affected, impaired or invalidated, and to the extent permitted by applicable Law, any such provision will be restricted in applicability or reformed to the minimum extent required for such provision to be enforceable. This provision will be interpreted and enforced to give effect to the original written intent of the parties prior to the determination of such invalidity or unenforceability.

 

(i)           Notices.  Any notice, request or other communication hereunder shall be given in writing and shall be served either personally, by overnight delivery or delivered by mail, certified return receipt and addressed to the following addresses:

 

(a)           If to Buyer:

 

 

 

If to Seller:

 

Pollex, Inc.

2005 De La Cruz Boulevard

Suite 235

Santa Clara, CA 95050

With a copy to:

 

Sichenzia Ross Friedman Ference LLP

 

61 Broadway

 

32nd Floor

 

New York, New York 10006

 

Attention: Darrin M. Ocasio, Esq.

 

 

 

[Signature Page Follows]

 

 

 

  

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[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered, effective as of the date first above written.

 

	 	
“SELLER”

	 
	 	 	 
	 	 	 
	 	POLLEX, INC.	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Seong Yong Cho	 
	 	 	Name: Seong Yong Cho	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	JOYON ENTERTAINMENT, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Seong Yong Cho	 
	 	 	Name: Seong Yong Cho	 
	 	 	Title: Chief Executive Officer	 
	 	 	 	 
	 	 	 	 
	 	“BUYER”	 
	 	 	 
	 	 	 
	 	JOYTOTO CO., LTD.	 
	 	 	 
	 	 	 	 
	 	By:	/s/ Seong Sam Cho	 
	 	 	Name: Seong Sam Cho	 
	 	 	Title: Chief Executive Officer	 

                                                                 

 

 

5ex1010.htm

EXHIBIT 10.10

US NATURAL GAS CORP

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated as of July 15, 2010 (this "Agreement"), by and between Chuck Kretchman (the "Employee"), and US NATURAL GAS CORP a Florida Corporation with its principal offices located at 33 6th Street S., Suite 600, St. Petersburg, FL 33701 (the "Company").

WHEREAS, the individual desires to be employed as a Chief Financial Officer of the Company; and

WHEREAS, the Company desires to employ the individual as Chief Financial Officer of the Company and the individual desires to continue his employment with the Company in the aforementioned capacity, all upon the terms and provisions, and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

Section 1.                      Definitions.  As used in this Agreement the following terms shall have the meanings set forth in this Section 1:

	
(a)

	
"Affiliate" of any Person means any stockholder or person or entity controlling, controlled by under common control with such Person, or any director, officer or key executive of such Person or any of their respective relatives. For purposes of this definition, "control," when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings that correspond to the foregoing.

	
(b)

	
"Cause" shall mean (i) the Company being subjected to any criminal liability under any applicable law as a result of any action or inaction on the part of the Employee, which the Employee did not, at the time, reasonably believe to be in the best interests of the Company; (ii) the conviction or admission of the Employee of, or plea by the Employee of nolo contendre to, a felony or crime which the Board of Directors concludes is likely to have a material and adverse effect on the reputation of the Company; (iii) if the Employee is chronically addicted to any narcotic or other illegal or controlled substance or repeatedly abuses any alcoholic product or any prescription stimulants or depressant, as determined by a physician designated by the Company, which in the reasonable opinion of the Board of Directors of the Company materially interferes with Employee's performance of his duties and obligations hereunder; (iv) the Employee committing fraud, or stealing or misappropriating any asset or property of the Company, including, without limitation, any theft or embezzlement; or (v) a breach of a material term or provision of this Agreement by the Employee which is not cured by the Employee within ten (10) business days after written notice of such breach from the Company is received by the Employee.

	
(c)

	
"Change of Control" shall mean the occurrence of any of the following: (i) a Person or group of Persons, other than any current member of the Board of Directors, obtains beneficial ownership of at least thirty percent (40%) of the outstanding capital stock of the Company; or (ii) a change in the membership of more than seventy percent (70%) of the current Board of Directors in any twelve (12) month period.

	
(d)

	
"Common Stock" shall mean the common stock, par value $0.001 per share, of the Company, and any other class of common stock of the Company created after the date of this Agreement in accordance with the Company's Certificate of Incorporation and applicable law.

	
(e)

	
"Competing Business" shall mean any business, enterprise or other Person that as one of its businesses or activities, is engaged in the development of and/or energy exploration, leasing of mineral rights, crude or natural gas production therewith that are provided by the Company.

  

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(f)

	
"Confidential and Proprietary Information" shall mean any and all (i) confidential or proprietary information or material not in the public domain about or relating to the business, operations, assets or financial condition of the Company or any Affiliate of the Company or any of the Company's or any such Affiliate's trade secrets, including, without limitation, research and development plans or projects; data and reports; computer materials such as programs, instructions and printouts; formulas; product testing information; business improvements, processes, marketing and selling strategies; strategic business plans (whether pursued or not); budgets; unpublished financial statements; licenses; pricing, pricing strategy and cost data; information regarding the skills and compensation of executives; the identities of clients and potential clients; intellectual property strategies and any work on any patents, trademarks and tradenames, prior to any filing or the use thereof in commerce; pricing, timing, sales terms, service plans, methods, practices, strategies, forecasts, know-how and other marketing techniques; and (ii) information, documentation or material not in the public domain by virtue of any action by or on the part of the Employee, the knowledge of which gives or may give the Company or any Affiliate of the Company an advantage over any Person not possessing such information. For purposes hereof, the term Confidential and Proprietary Information shall not include any information or material (i) that is known to the general public other than due to a breach of this Agreement by the Executive or (ii) was disclosed to the Employee by a Person who the Employee did not reasonably believe was bound to a confidentiality or similar agreement with the Company.

(g)           "CPI" shall have the meaning given to that term in Section 4(a) hereof.

	
(h)

	
"Discretionary Bonus" shall have the meaning given to that term in Section 4(c) hereof.

	
(i)

	
"Employment Term" shall have the meaning given to that term in Section 2 hereof.

	
(j)

	
"Good Reason" shall mean a substantial change to or reduction in the duties or responsibilities of the Employee such that the responsibilities of the Employee are no longer commensurate with the Employee's job title and daily duties with the Company as set forth herein, or the occurrence of Change of Control or a change in the Employee's job title from that of Field Supervisor of the Company which is not concurred in by the Employee within one (1) month of its occurrence or the breach of a material term or provision of this Agreement by the Company which is not cured by the Company within ten (10) business days after written notice of such breach from the Employee is received by the Company. The failure to renew this Agreement after the expiration of the Employment Term shall not constitute Good Reason.

	
(k)

	
"Incapacity" shall mean any illness or mental or physical incapacity or disability which prevents the Employee from performing his duties or obligations hereunder for a continuous period of sixty (60) consecutive days or for shorter periods aggregating ninety (90) days within any consecutive twelve (12) month period.

	
(l)

	
"Inventions" shall mean inventions, discoveries, concepts and ideas, whether patentable or not, patents, patent applications, copyrights and other intellectual property, including, without limitation, processes, methods, formulae and techniques, and improvements thereof or know-how related thereto, concerning any business activity of the Company or any Affiliate of the Company, with which the Employee becomes, directly or indirectly, involved as a result in whole or in part, directly or indirectly, of the Employee's employment by the Company, or any Affiliate of the Company, and whether conceived of solely by the Employee or jointly with the efforts of others.

	
(m)

	
"Performance Bonus" shall have the meaning given to that term in Section 4(c) hereof.

	
(n)

	
"Person" shall mean, without limitation, any natural person, corporation, partnership, limited liability company, joint stock company, joint venture association, trust or other similar entity or firm.

(o)           "Salary" shall have the meaning given to that term in Section 4(a) hereof.

	
(p)

	
"Without Cause" shall mean the termination of the Employee's employment hereunder by the Company, other than termination by the Company due to the Employee's death or Incapacity or based upon Cause.

Section 2. Employment and Term. The Company hereby employs the Employee as Chief Financial Officer of the Company and the Employee hereby accepts such employment in that capacity, upon the terms and provisions, and subject to the conditions, set forth in this Agreement, for a term commencing on July 15, 2010, and terminating on December 31, 2011, unless earlier terminated as provided in this Agreement (the "Employment Term").

Section 3. Employee's Duties. (a) Employee is hereby hired to perform services for Employer in the capacity of Chief Financial Officer and shall include all of the powers and duties usually incident to such position for a U.S. listed public company. In such capacity, Employee's duties shall consist of providing to the Company, professional services in the areas described below.

 

  

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Employee shall be responsible for

 

	  	
·         the preparation of all financial statements and documents in compliance with U.S. GAAP required to complete the Transaction, including drafting of all financial statements, Management Discussions and Analyses, and any other documents required by U.S. regulatory bodies;

 

	  	
·        creating and maintaining proper financial controls which shall include, but not be limited to, evaluating the Company’s internal controls and procedures in connection with Section 404 of the Sarbanes-Oxley Act to identify improvements to endure compliance with all regulatory and reporting requirements;

 

	  	
·        coordinating post-transaction capital raise with any investment banking firm, including preparation of detailed projections and English business plan/presentation, and meetings with, and presentations to, potential investors; and

  

	  	
·        communication with investors and shareholders regarding financial and operational matters of the Company.

 

	  	
·       preparation of all public filings, including annual and quarterly reports, management discussion and analysis, material change reports, insider ownership reports, and any other public reports required to be filed by the Company with a regulatory agency to maintain its stock exchange listing or quotation;

 

	  	
·       coordination with independent auditors on quarterly reviews and annual audits, including (i) supervision of Company staff to prepare financial results, schedules, and documents associated with such audit or review, (ii) resolution of complicated accounting issues that may arise during the review or audit, including drafting of comprehensive audit memos referencing appropriate U.S. accounting literature and reaching consensus with senior audit team members, and (iii) ensuring that all financials are properly presented in accordance with U.S. GAAP, as applicable;

 

	  	
·       implementation of internal controls and procedures improvements to comply with applicable regulatory and reporting, including performing required testing of internal controls over financial reporting to ensure that management is comfortable signing the certifications required by Section 404 of the Sarbanes-Oxley Act;

 

	  	
·       ensuring that the Company is in compliance with all other exchange requirements; communication with shareholders, analysts, and other investors;

 

	  	
·       supervision of Company accounting staff on monthly closings and other matters; and

 

	  	
·       other services as CFO and the Company may agree during the engagement

 

	
(a)  

	
Employee and Employer agree that the Employee shall devote his full time, attention and skills during the normal working hours designated to him hereunder exclusively to the performance of his duties hereunder, and effectively perform his duties and make his best endeavors to ensure the satisfactory accomplishment of the assignment to him as Employer’s Chief Financial Officer. Employee shall perform the Employee's duties and obligations hereunder diligently, competently, faithfully and to the best of his ability. The Employee may not serve on the board of directors or other governing boards of other corporations or businesses or industry organizations.

Section 4. Compensation.

	
(a)

	
In consideration of the performance of all of the duties and obligations to be performed by the Employee hereunder, the Company agrees to pay and the Employee agrees to accept, salary at an annual rate as defined below (the “Salary”), payable in accordance with the Company's regular payroll practices as from time to time in effect, less all withholdings and other deductions required to be deducted in accordance with any applicable federal, state, local or foreign law, rule or regulation.

 

  

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Period

	
Annual Salary

	
July 1, 2010-September 30, 2010

	
$50,000.00

	
September 30, 2010-December 31, 2010

	
$65,000.00

	
January 1, 2011- December 31, 2011

	
$90,000.00

 

	
(b)

	
In consideration of the Employee’s execution and delivery of this Agreement, the Company shall issue to the Executive options to purchase common stock of the Company as set forth below. All of the options set forth in this Section 4(b) shall have an expiration period three years from the date they are fully vested and shall fully vest upon the occurrence of a Change in Control or upon a termination of this Agreement by the Employee for Good Reason.  The Company shall use its best efforts to have all shares underlying these options to be freely trading shares upon exercise of such options and covenants that failure to do so, or failure to do so within a timely period following execution of this Agreement, shall constitute “Good Reason” for purposes of this agreement:

 

	Number of Shares   	Strike Price	Vesting Date
	100,000  	$0.15 	Execution of this Agreement
	250,000	$0.15       	December 31, 2010
	250,000  	$0.15  	June 30, 2011

 

	
(c)

	
The Employee shall be entitled to additional options or bonuses in amounts and under terms as determined by the Board of Directors, or the Compensation committee if the Company so forms one.

	
(d)

	
Should there be a Change of Control of the Company or any other transaction in which the Company is not the surviving entity during the Employment Term, then as part of that transaction, the Company shall try in its best efforts to have the surviving entity modify the Agreement in an equitable manner to provide the Employee the same type of benefits that he is entitled to earn pursuant to Section 4(c) of this Agreement.

Section 5. Benefits, Vacation. (a) During the Employment Term, the Employee shall be entitled to such insurance and health and medical benefits as are generally made available to the other employees of the Company, as a group, pursuant to such plans as are from time to time maintained by the Company; provided, however, that the Employee shall be required to comply with the conditions of coverage attendant to such plans.

	
(a)

	
During each contract year of the Employment Term, the Employee shall be entitled to two (2) weeks of vacation. The Employee shall take vacation at such time or times as the Employee desires, subject to the concurrence of the Company based upon the then-current business needs and activities of the Company. Vacation shall accrue if unused during the term of employment and shall be payable upon request of the Employee within 30 days after the end of the year in which the vacation was accrued and unused.

	
(b)

	
During the Employment Term, the Employee shall be eligible to participate in the profit sharing and other benefit plans that the Company from time to time makes available to the senior executives of the Company as a group, subject to the terms, provisions and conditions of such plans, including, without limitation, any vesting periods and eligibility criteria.

 

Section 6. Termination of Employment Term. (a) In the event of the death of the Employee during the Employment Term, the Employee's employment hereunder shall automatically terminate as of the date of death; provided, however, that the Employee 's estate or legal representative, as the case may be, shall be entitled to receive, and the Company shall pay, any accrued and unpaid Salary for a two (2) month period following the date of death, any Performance Bonus that would be payable for the two (2) month period in which the Employee died which are properly owing to the Employee pursuant to Section 6 hereof.

	
(a)

	
In the event of the Employee 's Incapacity, the Company may, in its sole discretion, terminate the Employee 's employment hereunder upon written notice to the Employee; provided, however, that the Employee or the Employee 's legal representative, as the case may be, shall be entitled to receive, and the Company shall pay, (i) any accrued and unpaid Salary for a two (2) month period from the date of termination, less any amounts received by the Employee under any disability insurance policy maintained by the Company; and (ii) any Performance Bonus that would be payable for the two (2) month period after the Employee's employment is terminated due to Incapacity and reimbursement of business expenses which are properly owing to the Employee pursuant to Section 6 hereof, through the date of termination;

 

 

  

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(b)

	
The Company shall have the right to terminate the Employee's employment under this Agreement at any time for Cause upon written notice to the Employee. In the event the Employee's employment hereunder is terminated by the Company for Cause, the Company shall only be obligated to pay accrued and unpaid Salary through the date of termination and the Company shall pay any accrued and unreimbursed business expenses which are properly owing to the Employee through the date of termination.

	
(c)

	
The Company shall have the right to terminate the Employee's employment hereunder Without Cause at any time upon thirty (30) days' prior written notice to the Employee. If the Company terminates the Employee's employment hereunder Without Cause, the Company shall (i) continue to pay Salary to the Employee provided for hereunder for a period equal to a two (2) month from the date of termination and (ii) pay any unreimbursed business expenses which are properly owing to the Executive pursuant through the date of termination. In addition, should the Employee's employment hereunder be terminated Without Cause, the Company shall pay to the Employee the Performance Bonus, if any, for the entire contract year in which the termination of the Executive's employment with the Company hereunder occurs.. The Employee shall not be under any obligation to mitigate the Company's obligation pursuant to this Section 6(d) by securing other employment or otherwise.

	
(d)

	
The Employee shall have the right to terminate his employment with the Company hereunder for Good Reason, upon not less than thirty (30) days prior written notice to the Company. Should the Employee terminate his employment hereunder for Good Reason, the Company shall be obligated to make the payments to the Employee provided for in Section 6(c) hereof upon the termination of the Employee's employment by the Company Without Cause.

	
(e)

	
The failure of the Company to continue the employment of the Employee upon expiration of the Employment Term as defined in Section 2 shall not be considered a termination of employment for purposes of this Agreement. The Company's obligations with respect to the Performance Bonus for the last year of the Employment Term, if any, shall survive the expiration of this Agreement.

 

Section 7. Restrictions Respecting Competing Businesses, Confidential Information, etc. The Employee acknowledges and agrees that by virtue of the Employee's position and involvement with the business and affairs of the Company, the Employee will develop substantial expertise and knowledge with respect to all aspects of the Company's business, affairs and operations and will have access to all significant aspects of the business and operations of the Company and to Confidential and Proprietary Information. The Employee acknowledges and agrees that the Company will be damaged if the Employee were to breach any of the provisions of this Section 7 or if the Employee were to disclose or make unauthorized use of any Confidential and Proprietary Information. Accordingly, the Employee expressly acknowledges and agrees that the Employee is voluntarily entering into this Agreement and that the terms, provisions and conditions of this Section 7 are fair and reasonable and necessary to adequately protect the Company.

	
(a)

	
The Employee hereby covenants and agrees that, during the Employment Term and thereafter, unless otherwise authorized by the Company in writing, the Employee shall not, directly or indirectly, under any circumstance: (i) disclose to any other Person (other than in the regular course of business of the Company) any Confidential and Proprietary Information, other than pursuant to applicable law, regulation or subpoena or with the prior written consent of the Company; (ii) act or fail to act so as to impair the confidential or proprietary nature of any Confidential and Proprietary Information; (iii) use any Confidential and Proprietary Information related to the Company's business other than for the sole and exclusive benefit of the Company; or (iv) offer or agree to, or cause or assist in the inception or continuation of, any such disclosure, impairment or use of any Confidential and Proprietary Information. Following the Employment Term, the Employee shall return all documents, records and other items containing any Confidential and Proprietary Information to the Company (regardless of the medium in which maintained or stored), without retaining any copies, notes or excerpts thereof, or at the request of the Company, shall destroy such documents, records and items (any such destruction to be certified by the Executive to the Company in writing).

	
(b)

	
The Employee covenants and agrees that, while the Employee is employed by the Company and for  (6) six months after the Employee ceases to be employed by the Company, if the Employee (i) voluntarily terminates his employment with the Company for Good Reason or (ii) is terminated by the Company for Cause, the Employee shall not, directly or indirectly, manage, operate or control, or participate in the ownership, management, operation or control of, or otherwise become interested in (whether as an owner, partner, lender, consultant, Executive, agent, supplier, distributor or otherwise) any Competing Business whose operations are in the state of West Virginia, Kentucky, or, directly or indirectly, induce or influence any customer or other Person that has a business relationship with the Company, or any Affiliate of the Company, to discontinue or reduce the extent of such relationship; provided that in the case of a termination by the Employee pursuant to clause (i) the Company at all times continues to pay the amounts owing to the Employee pursuant to Section 7(b) hereof. For purposes of this Agreement, the Employee shall be deemed to be directly or indirectly interested in a business if he is engaged or interested in that business as a director, officer, Employee, agent, partner, individual proprietor, consultant, advisor or otherwise, but not if the Employee's interest is limited solely to the ownership of not more than 5% of the securities of any class of equity securities of a corporation or other Person whose shares are listed or admitted to trade on a national securities exchange or are quoted on NASDAQ or a similar means if NASDAQ is no longer providing such information.

	
(c)

	
While the Employee is employed by the Company and for (6) six months after the Employee ceases to be employed by the Company, the Employee shall not, directly or indirectly, solicit to employ for himself or others any employee of the Company or any Affiliate of the Company who was an employee of the Company or any Affiliate of the Company as of the date of the termination of the Employee's employment with the Company, or to solicit any such employee to leave such employee's employment or join the employ of another, then or at a later time; provided that the foregoing shall not apply to any family member of the Employee who is employed by the Company or any such Affiliate or the Employee's administrative assistant.

	
(d)

	
The parties agree that nothing in this Agreement shall be construed to limit or negate the common law of torts, confidentiality, trade secrets, fiduciary duty and obligations where such laws provide the Company with any broader, further or other remedy or protection than those provided herein.

	
(e)

	
Because the breach of any of the provisions of this Section 7 may result in immediate and irreparable injury to the Company for which the Company may not have an adequate remedy at law, the Company shall be entitled, in addition to all other rights and remedies, to a decree of specific performance of the restrictive covenants contained in this Section 7 and to a temporary and permanent injunction enjoining such breach, without posting a bond or furnishing similar security.

  

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Section 8. Indemnification and Insurance.  The Company hereby agrees to fully and promptly indemnify the Employee for any and all actions brought against the Employee related to his employment with the Company.  Toward that end, the Company agrees to obtain and maintain General Liability Insurance (“G&L”) during the term of this Agreement in amounts, terms and conditions reasonably acceptable.

Section 9. Severability. Each term and provision of this Agreement is severable; the invalidity, illegality or unenforceability or modification of any term or provision of this Agreement shall not affect the validity, legality and enforceability of the other terms and provisions of this Agreement, which shall remain in full force and effect. Since it is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought, should any particular provision of this Agreement be deemed invalid, illegal or unenforceable, the same shall be deemed reformed and amended to delete that portion that is adjudicated to be invalid, illegal or unenforceable and the deletion shall apply only with respect to the operation of such provision and to the extent of such provision and, to the extent that a provision of this Agreement would be deemed unenforceable by virtue of its scope, but may be made enforceable by limitation thereon, each party agrees that this Agreement shall be reformed and amended so that the same shall be enforceable to the fullest extent permissible under the laws and public policies applied in the jurisdiction in which enforcement is sought.

Section 10. Assignment. This Agreement and the rights and obligations of the parties hereto shall bind and inure to the benefit of each of the parties hereto, the heirs, executors, administrators and legal representatives of the Employee and the successors and permitted assigns of the Company. Neither this Agreement nor any rights or benefits hereunder may be assigned by the Employee or the Company without the prior written consent of the other party hereto, except that the Company may assign any of its rights or obligations hereunder to any other Person which purchases all or substantially all of the common stock or assets of the Company or is the successor to the Company by merger, consolidation or other similar transaction.

Section 11. Amendment; Entire Agreement. This Agreement may not be modified, amended, altered or supplemented except by a written agreement executed by the parties hereto. This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter of this Agreement and supersedes all prior and/or contemporaneous agreements and understandings of any kind and nature (whether written or oral) between the parties with respect to such subject matter, all of which are merged herein.

Section 12. Waivers. Waiver by either party of either breach of or failure to comply with any provision of this Agreement by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or a waiver of any other breach of, or failure to comply with, any other provision of this Agreement, any such waiver must be in writing to be limited to the specific matter and instance for which it is given. No waiver of any such breach or failure or of any term or condition of this Agreement shall be effective unless in a written instrument and signed by the waiving party and delivered, in the manner required for notices generally, to the affected party.

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Section 13. Notices. All notices, consents, directions, approvals, instructions, requests and other communications required or permitted by the terms of this Agreement to be given to any person shall be in writing, and shall be delivered personally or sent by certified mail, return receipt requested (postage prepaid) or by telecopy, to the parties at the following addresses or telecopy numbers, as applicable:

If to the Employee:

Mr. Chuck Kretchman

7040 32nd Avenue North

St. Petersburg, FL 33701

 

If to the Company:

US Natural Gas Corp

33 6th Street S.

Suite 600

St. Petersburg, FL 33701

Fax: 815-846-0755

or to such other address as a party may have furnished to the other parties in writing in accordance herewith. Any notice, consent, direction, approval, instruction, request or other communication given in accordance with this Section 14 shall be effective after it is received by the intended recipient.

Section 14. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD OR REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAWS. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED WITHOUT REGARD TO ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE DRAFTED.

 

Section 15. Headings; Counterparts. The headings contained in this Agreement are inserted for reference purposes only and shall not in any way affect the meaning, construction or interpretation of this Agreement. This Agreement may be executed in two (2) counterparts, each of which when executed shall be deemed to be an original, but both of which, when taken together, shall constitute one and the same document.

  

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IN WITNESS WHEREOF, the Employee and the Company have executed this Agreement as of the date first above written.

Chuck Kretchman

___________________________________________

Individually

US Natural Gas Corp

By: ________________________________________

Name: Wayne Anderson

Title:    President

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