Document:

exhibit_10-34.htm

                                                               Exhibit 10.34

October 1, 2009

Mr. Eric Orme

  

Dear Eric:

 On behalf of HSW International, Inc. (“HSW International” or the “Company”), I am pleased to offer you employment as Chief Technology Officer of HSW International under the terms set forth below in this letter agreement (the “Letter Agreement”), commencing on October 1, 2009 (the “Commencement Date”).  The terms of your employment are set forth as follows:

1. Services and Duties.

(a) Position.  You will serve as Chief Technology Officer of HSW International, and shall perform all duties consistent with that position and such duties as shall be reasonably prescribed from time to time by the Company.

(b) Devotion of Time.  During the term of this Letter Agreement, you agree to devote your full attention, energies and best efforts to rendering services on behalf of HSW International (or its parent, subsidiaries or other affiliates if directed to do so by the Company).  You shall not engage in any outside employment without the express written consent of the Company.  Notwithstanding the above, you shall be permitted, to the extent such activities do not substantially interfere with the performance of your duties and responsibilities hereunder to (i) manage your personal, financial and legal affairs, (ii) serve on civic or charitable boards or committees (it being expressly understood and agreed that your continuing to serve on any such board and/or committees on which you are serving, or with which you are otherwise associated, as of the Commencement Date, shall be deemed not to interfere with the performance of your duties and responsibilities under this Letter Agreement); and, (iii) investing or trading in stocks, bonds, commodities or other forms of investment, including real property.

2. Term.

This term of this Letter Agreement shall begin on the Commencement Date and, unless earlier terminated as provided herein, shall end on the third anniversary of the Commencement Date (the “Term”).  Thereafter, this Letter Agreement shall terminate, and, unless either party shall elect in writing not to continue your employment with the Company, you shall become an at-will employee of the Company.

3. Compensation and Related Matters.

(a) Base Salary.  Your starting salary upon the Commencement Date will be $18,750 per month ($225,000 annually) through December 31, 2009, and then 

 

  

  

  

 

will increase to $20,833.33 per month ($250,000 annually) (the “Base Salary”).  The Base Salary will be paid to you (minus applicable federal, state and local payroll taxes, and other withholdings required by law or authorized by you) in accordance with HSW International’s normal payroll practices.  The Compensation Committee of the Board will review your Base Salary compensation for any discretionary merit-based increases on January 1, 2011, and January 1, 2012.

(b) Bonus Compensation.  In addition to the Base Salary, you will be eligible for an annual discretionary bonus to be determined by the Board based on performance criteria of you and the Company to be discussed with and communicated to you within sixty days by the Compensation Committee of the Board (“Bonus Plan”).

(c) Expenses.  During your employment hereunder, you shall be entitled to receive prompt reimbursement for all reasonable business and entertainment expenses incurred by you in performing services hereunder, provided that you properly account therefor to the Company.  All such reimbursements shall be subject to HSW International’s policies and procedures.

(d) Other Benefits.  Beginning on the Commencement Date, you shall be entitled to participate in other benefit plans to which you are eligible pursuant to Company policy, which may be amended from time to time in the Company’s discretion, and the applicable plan documents (the “Standard Benefit Plans”).  Such shall include medical and health benefit plans consistent with those granted other executives in the Company.

(e) Vacations.  You shall be entitled to four weeks of paid vacation per year in accordance with HSW International’s policies and procedures.

(f) Stock Options.  HSW International will grant to you options to acquire 225,000 shares of HSW International’s common stock (the “Options”) in accordance with the Company’s 2006 Equity Incentive Plan (the “Incentive Plan”).  The Options represent the entirety of the stock-based compensation that you will receive during the Term.  You acknowledge that the grant date for the Options is anticipated to be approximately one week following the Company’s public disclosure of its anticipated entrance into a transaction agreement with ShareCare, Inc.  Unless otherwise defined herein, capitalized terms used in this sub-Section have the meanings assigned such terms in the Incentive Plan.  The Award Agreement will reflect HSW International’s standard terms and conditions for stock option grants except as follows:

 

(i) The Options shall have an exercise price equal to 100% of the Fair Market Value on the date of the Award.

 

(ii) Twenty-five thousand shares of the Options shall become immediately vested upon the Commencement date, and 1/36th of the remainder shall become fully vested on each monthly anniversary of the Commencement Date for the Term.  Except as provided elsewhere in this Letter Agreement, vesting shall occur at the times indicated only if you 

 

  

  

  

 

remain an employee of the Company and this Letter Agreement is then in effect.

 

(iii) If either party should terminate your employment and this Letter Agreement for any reason, then all un-vested Options shall terminate with such termination.

 

(iv) The term of the Option will be ten years from the date of the Award Agreement (“Option Term”).

 

(v) Options that are vested shall be irrevocable and may be exercised in whole or in part, by you, your heirs or estate, for the full remaining Option Term so long as you remain an employee of the Company. Otherwise, all Options held by you shall terminate and no longer be exercisable one year from the termination of your employment with HSW International for any reason.

 

(vi) If a Change in Control (as defined below) should occur during the Term, then all un-vested Options shall become fully vested as of the date of said Change in Control.  “Change of Control” means any of the following: (a) a merger or consolidation of HSW International into or with any other person or persons, or a transfer of equity interests in a single transaction or a related series of transactions, in which in any case the equity holders of HSW International immediately prior to such merger, consolidation, sale, exchange, conveyance or other disposition or first of such series of transactions possess less than a majority of the voting power of Employer’s or any successor entity’s issued and outstanding equity securities immediately after such transaction or series of such transactions; or (b) a single transaction or related series of transactions, pursuant to which a person or persons acquire all or substantially all of HSW International’s assets determined on a consolidated basis.

4. Termination.

During the Term, your employment hereunder may be terminated by HSW International or by you under the following circumstances:

(a) Mutual Agreement.  Your employment may be terminated by mutual written agreement between you and the Company.

(b) Death.  Your employment shall terminate immediately upon your death.

(c) Disability.  The Company may terminate your employment if you are unable to perform the essential functions of your job under this Letter Agreement due to a physical or mental impairment (“Disability”).  However, under no circumstances will the Company terminate your employment pursuant to its rights in this subsection provided that such Disability does not continue past 120 days from the point the Company notifies you in writing of your Disability.

  

  

  

 

(d) Cause.  Your employment may be terminated immediately for Cause.  “Cause” means the occurrence or existence of any of the following with respect to you, as determined in good faith by the Board (with your abstaining if then a member of the Board):

(i) any act of dishonesty resulting in a materially adverse effect upon the Company or material misappropriation, embezzlement, fraud or similar conduct involving HSW International or any affiliate;

(ii) the conviction or a plea of nolo contendere, guilty or the equivalent with respect to a felony charge or crime involving moral turpitude or dishonesty;

(iii) any intentional damage by you of a material nature to any property of HSW International or any affiliate;

(iv) conduct by you which constitutes gross negligence in serving in your capacity as an employee of  the Company or any affiliate which includes, but is not limited to, the disclosing of trade secrets or confidential information of the Company or any affiliate to persons not entitled to receive such information;

(v) any breach of any non-competition or non-solicitation agreement between you and HSW International or any affiliate;

(vi) any material breach by you of any material obligation under this Letter Agreement, or fiduciary duties to HSW International or any affiliate which is not cured by you within 30 days of receipt of written notice specifying such breach; or

(vii) the engaging by you in employment practices which violate federal, state or local law.

(e) Termination Without Cause.  Notwithstanding any provisions of this Letter Agreement to the contrary, prior to the expiration of the Term, HSW International may terminate your employment for any reason other than those specified in the foregoing paragraphs (a), (b), (c) or (d) (or for no reason) at any time effective upon delivery of 30 days written notice by the Board, provided that the Company may at its election provide continued Base Salary payments and medical and health benefits for all or a portion of such thirty (30) day period in lieu of such notice.

(f) Termination by You with Notice.  You may terminate your employment (resign) at any time effective upon 30 days written notice to the Board, provided that the Company may at its election provide continued Base Salary payments and medical and health benefits for all or a portion of such thirty (30) day period in lieu of such notice.

(g) Expiration at End of Term.  The Employer may permit this Letter Agreement to expire, by its terms, upon the giving of written notice thereof to Executive at least 90 days prior to the expiration of the Term.

  

  

  

 

5. Compensation and Payments Upon Termination.

You will be entitled to the following compensation from HSW International (in lieu of all other sums payable to you hereunder) upon the termination of your employment.

(a) Mutual Agreement.  If your employment is terminated as a result of mutual agreement, HSW International shall pay your Base Salary, plus all accrued, earned and unused benefits under the Standard Benefit Plans, in each case, through the date of termination, plus the amount actually earned under any Bonus Plan (i.e., prorated for any year less than a full calendar year) as of the date of your termination, and you will be entitled to receive any vested pension and retirement benefits (for all purposes of this Letter Agreement, all such accrued, earned and unpaid items through the applicable date of termination (minus applicable federal, state and local payroll taxes, and other withholdings required by law or authorized by you) are referred to as the “Earned Amounts”).

(b) Death.  If your employment is terminated as a result of death, HSW International will pay to your estate the Earned Amounts and shall have no further obligations to you or your heirs or estate.

(c) Disability.  If your employment is terminated as a result of Disability, you will be provided long term disability benefits to which you may be eligible (if any), in accordance with HSW International’s then existing Standard Benefit Plans and HSW International shall pay to you the Earned Amounts and shall have no further obligations to you.

(d) Cause.  If your employment is terminated for Cause, HSW International shall pay to you the Earned Amounts and shall have no further obligations to you.

(e) Termination Without Cause.  If HSW International shall elect to terminate your employment for a reason other than those described in (a), (b), (c), (d) or (g) of Section 4 of this Letter Agreement (or for no reason), then, HSW International shall pay to you the following and shall have no further obligations to you:

(i) the Earned Amounts; plus,

(ii) your Base Salary and medical and health benefits in effect as of the date of termination for a period of: (A) twelve months from the date of termination if such occurred prior to October 1, 2010; (B) nine months from the date of termination if such occurred between October 1, 2010, and September 30, 2011; or (C) six months from the date of termination if such occurred between October 1, 2011 and the end of the Term, such period not to extend beyond the original end of the Term; each, payable (minus applicable federal, state and local payroll taxes, and 

 

  

  

  

 

other withholdings required by law or authorized by you) as if you remained an active employee of the Company (the “Severance Payment”); provided, however, no Severance Payment shall be payable under this Subsection 5(e)(ii) unless you execute and deliver to the Company, in a form acceptable to the Company and its counsel, a general release of claims against the Company (the “Release”), which Release is not revoked by you within any time period allowed for revocation under applicable law.  Such Release must be signed by you and any revocation period must have expired within sixty (60) days after the effective date of your termination of employment.

(f) Termination by You with Notice.  In the event that you terminate your employment (resign),  HSW International shall pay to you the Earned Amounts and shall have no further obligations to you.

(g) Expiration at End of Term.  In the event HSW International elects to permit this Letter Agreement to expire by its own terms, pursuant to the provisions of Section 4(g), HSW International will pay to you the Earned Amounts through the end of the Term and shall have no further obligations to you.

6. Non-Disclosure.

(a) Proprietary Information.  By virtue of your employment with HSW International, you will have access to confidential, proprietary, and highly sensitive information relating to the business of the Company and which is a competitive asset of the Company (“Proprietary Information”).  Such Proprietary Information includes all information that relates to the business of the Company, which is or has been disclosed to you orally or in writing by the Company or obtained by virtue of work performed for the Company, is or was developed by the Company, and is not generally available to or known by individuals or entities within the industry in which the Company is or may become engaged or readily accessible by independent investigation.  The Proprietary Information sought to be protected includes, without limitation, information pertaining to:  (i) the identities of customers and clients with which or whom the Company does or seeks to do business, as well as the point of contact persons and decision-makers at these customers and clients, including their names, addresses, e-mail addresses and positions; (ii) the past or present purchasing history and the past and/or current job requirements of each past and/or existing customer and client; (iii) the volume of business and the nature of the business relationship between the Company and its customers and clients; (iv) the pricing of the Company’s products or services, including any deviations from its standard pricing for particular customers and clients; (v) the Company’s business plans and strategy; (vi) information regarding the Company’s employees, including their identities, skills, talents, knowledge, experience, and compensation; (vii) the Company’s financial results and business condition; and (viii) computer programs and software developed by the Company and tailored to the Company’s needs by its employees, independent contractors, or vendors; (ix) information relating to the Company’s vendors or other key suppliers; (x) any past or present merchandise or supply sources in the future; (xi) system 

 

  

  

  

 

designs, procedure manuals, automated data programs, reports, personnel procedures, and supply and service resources.  Proprietary Information may be contained on HSW International’s computer network, in computerized documents or files, or in any written or printed documents, including any written reports summarizing such information.

(b) Non-Disclosure of Proprietary Information.  You acknowledge that HSW International’s Proprietary Information will be disclosed to you throughout your employment at the Company in order to enable you to perform your duties for the Company.  Finally, you acknowledge that the unauthorized disclosure of Proprietary Information could place the Company at a competitive disadvantage.  Consequently, during your employment and for a period of two (2) years thereafter, you agree not to use, publish, disclose or divulge, directly or indirectly, any Proprietary Information except in the performance of your duties to the Company.  You further agree not to make un-authorized copies of any Proprietary Information during your employment.

(c) Survival of Your Obligations.  You understand and agree that your obligations under this Section shall survive the termination of this Letter Agreement and/or your employment with HSW International for a period of two years, except for Proprietary Information that constitutes trade secrets in which case the obligations of confidentiality shall continue in perpetuity.  You further understand and agree that your obligations under this Section are in addition to, and not in limitation or preemption of, all other obligations of confidentiality which you have to HSW International under general legal or equitable principles, or other policies implemented by the Company.

7. Return of Company Property.

You acknowledge that all memoranda, notes, correspondence, databases, computer discs, computer files, computer equipment and/or accessories, pagers, telephones, passwords or pass codes, records, reports, manuals, books, papers, letters, CD-ROM diskettes, keys, Internet database access codes, client profile data, job orders, client and customer lists, contracts, software programs (including source code), information and records, drafts of instructions, guides and manuals, and other documentation (whether in draft or final form), and other sales, financial or technological information relating to the Company’s business, and any and all other documents containing Proprietary Information furnished to you by any representative of the Company or otherwise acquired or developed by you in connection with you association with the Company (collectively, “Recipient Materials”) shall at all times be the property of the Company.  Within forty-eight (48) hours of the termination of your employment for any reason, you will return to the Company any Recipient Materials (inclusive of any copies) that are in your possession, custody or control.

8. Non-Compete and Non-Solicitation of Customers/Clients.

(a) Access to Proprietary Information.  You acknowledge that the special relationship of trust and confidence between you, HSW International, and its clients and customers creates a high risk and opportunity for the misappropriation of the 

 

  

  

  

 

relationship and goodwill existing between HSW International and its clients and customers.  You further acknowledge and agree that it is fair and reasonable for HSW International to take steps to protect itself from the risk of such misappropriation.  You further acknowledge that, at the outset of your employment with HSW International and/or throughout your employment with the Company, you have been or will be provided with access to and informed of HSW International’s Proprietary Information, which will enable you to benefit from the Company’s goodwill and know-how.

(b) Inevitable Disclosure.  You acknowledge that it would be inevitable in the performance of your duties as a director, officer, employee, investor, agent or executive of any person, association, entity, or company which competes with HSW International to disclose and/or use HSW International’s Proprietary Information, as well as to misappropriate HSW International’s goodwill and know-how, to or for the benefit of such other person, association, entity, or company.  You also acknowledge that, in exchange for the execution of the non-solicitation restriction set forth in Section 8(c), you have received substantial, valuable consideration.  You further acknowledge and agree that this consideration constitutes fair and adequate consideration for the execution of the non-solicitation restriction set forth in this Section 8.

(c) Covenant Not to Compete.  You agree that during your employment with HSW International and, if terminated, for a period following employment that continues so long as (i) Severance Payment is being made, or (ii) you hold any vested, unexercised Options that have not been terminated (the “Restrictive Period”), you shall not, without the prior written consent of the Board, directly or indirectly, on your own behalf or in the service of or on behalf of others, within the Territory, perform the same or substantially the same duties you performed for HSW International, on behalf of any business that competes with HSW International.  You and the Company acknowledge that the business of the Company is very broad in scope and that your duties are equally broad in scope because you are the CTO with overall technology responsibility for the entire business.  Consequently, “Territory” means the United States of America, China and Brazil.  The Restrictive Period shall not apply during any time following termination of your employment when no Severance Payment is being made and none of the Options have an exercise price higher than the volume weighted average price of the Company’s common stock over the five most recent trading days.

(d) Non-Solicitation of Customers.  Ancillary to the enforceable promises set forth in this Letter Agreement as well as to protect the vital interests described in this Letter Agreement, you agree that, while you are employed by HSW International and during the Restrictive Period, you will not, without the prior written consent of HSW

 

  

  

  

 

International, directly or indirectly, solicit any customer for the purpose of providing products or services that compete with products and services provided by the HSW International.  This restriction is limited to customers with whom you had material contact during your employment for the purpose of performing your job duties at the Company.  You also agree that, while you are employed by HSW International and for twelve months thereafter, you will not, without the prior written consent of HSW International, directly or indirectly, solicit any business partner of HSW International for the purpose of enticing that business partner to alter, limit or terminate its relationship with HSW International.  This restriction is limited to business partners with whom you had material contact during your employment for the purpose of performing your job duties at the Company.

(e) Reasonable Restrictions.  You agree that the restrictions set forth above are ancillary to an otherwise enforceable agreement, are supported by independent valuable consideration, and that the limitations as to time, geographical area, and scope of activity to be restrained by this Section 8 are reasonable and acceptable, and do not impose any greater restraint than is reasonably necessary to protect the goodwill and other business interests of HSW International.  You agree that if, at some later date, a court of competent jurisdiction determines that the non-competition and/or the non-solicitation provisions set forth in this Section 8 do not meet the criteria set forth in applicable law, this Section 8 may be reformed by the court and enforced to the maximum extent permitted under applicable law.

(f) Breach.  If you are found to have violated any of the provisions of this Section 8, you agree that the restrictive period of each covenant so violated shall be extended by a period of time equal to the period of such violation by him.  You understand that your obligations under this Section 8 shall survive the termination of your employment with the Company and shall not be assignable by you.

9. Non-Solicitation of Employees and Executives.

You acknowledge that, as part of your employment or association with HSW International, you will become familiar with the salary, pay scale, capabilities, experiences, skill and desires of the Company’s employees.  In order to protect the confidentiality of such information, as well as HSW International’s investment in and relationships with such employees, you agree that, for a period of 12 months following the termination of your employment with HSW International, whether such termination occurs at the insistence of you or the Company, you shall not directly or indirectly recruit or solicit employees of HSW International with whom you had contact for the purpose of performing your job duties.  This restriction is limited to recruiting or soliciting for the purpose of enticing the employee to end his or her relationship with HSW International.  Your obligations under this Section 9 shall survive the termination of this Letter Agreement and your employment with HSW International.

10. Remedies.

You hereby acknowledge and agree that in the event that you violate any of the provisions set forth in Sections 6, 7, 8, or 9 of this Letter Agreement, HSW International will suffer immediate and irreparable harm which cannot be accurately calculated in monetary damages.  Consequently, you acknowledge and agree that the Company shall – without limitation to or waiver of any other relief available to the Company – be entitled 

 

  

  

  

 

to immediate injunctive relief, either by temporary or permanent injunction, to prevent such a violation.

11. Notification of Prospective Employment.

Prior to accepting employment or an association with any third party which is engaged in a business competitive to the business conducted by HSW International or which, because of the nature of your proposed or potential position with the third party, may require you to use or disclose the Company’s Proprietary Information, you agree to notify such third party that you are bound by the terms of this Letter Agreement.  You also agree that the Company may, at any time while any of the non-disclosure or non-solicitation covenants contained in this Letter Agreement are in force, provide notice of the existence of this Letter Agreement to any third party with whom or which you propose to negotiate or are negotiating concerning employment or an association or to accept employment, or with whom or which you have accepted employment or an association, without any liability to you for any such notice.

12. Inventions, Ideas/Patentable Inventions.

You agree to disclose, fully and promptly, and only to HSW International, all ideas, methods, plans, improvements or patentable inventions of any kind which are made or discovered, in whole or in part, by you during the performance of your job duties; that result from any aid, support, or assistance by HSW International; or that are created during your work time with HSW International.  In connection with any invention, discovery, concept or idea subject to the foregoing Sections, you will promptly execute a specific assignment of any title, shop-right or license to the Company, and, if requested to do so, will cooperate fully with the Company to secure a patent, shop-right, or license therefor in the United States and/or foreign countries.  However, nothing in this Letter Agreement shall require any assignment otherwise prohibited by law.  You further agree that any and all work product created or performed by you while you are working with or on behalf of the Company, is a “work for hire” under the terms of the United States Copyright Act, and shall be and remain the exclusive property of the Company.  You hereby assign any and all rights, title, and ownership interests that you may now have or hereafter acquire in or to such work product to HSW International.  In the event the Company is unable for any reason, after reasonable effort, to secure your signature on any document needed in connection with the actions specified in the preceding paragraph, you hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as your agent and attorney in fact, which appointment is coupled with an interest, to act for and in your behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by you.  You hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which you now or may hereafter have for infringement of any invention, discovery, concept or idea assigned hereunder to the Company.

  

  

  

13. No Conflicting Obligations.

You hereby represent that, except as you have disclosed in writing to the Company, you are not bound by the terms of any agreement with any other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of your employment with the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party. You hereby further represent that, to the best of your knowledge, your performance of all  the terms of this Letter Agreement and as an employee of the Company does not and shall not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by you in confidence or in trust prior to your employment with the Company, and you will not knowingly disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any third party.

14. Successors; Binding Agreement.

 This Letter Agreement shall be binding upon, and insure to the benefit of, HSW International, you, and their respective successors, assigns, personal and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.  Without limiting the generality of the foregoing, HSW International may assign this Letter Agreement to any successor of HSW International (or the same may remain with HSW International as a subsidiary of a larger institution), without your consent, with such assignee being required to perform the Company’s obligations hereunder.

15. Complete Agreement; Survival.

This Letter Agreement sets forth the entire agreement among HSW International and you concerning the subject matter hereof, and supersedes all prior written or oral understandings of the parties.  Sections 6, 7, 8, 9, 10 11 and 12 of this Letter Agreement shall survive the termination of Employee’s employment regardless of the party terminating the employment and regardless of the manner of such termination.

16. Notice.

For purposes of this Letter Agreement, notices and all other communications provided for shall be in writing and shall be deemed to have been duly given when (i) delivered personally; (ii) sent by telecopy or similar electronic device and confirmed; (iii) delivered by overnight express; or (iv) sent by registered or certified mail, postage prepaid, addressed as follows:

If to you:

Eric Orme

  

  

  

  

 

If to HSW International:

HSW International, Inc.

3350 Peachtree Road

One Capital City Plaza, Suite 1600

Atlanta, GA 30326

Attention: General Counsel

or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

17. Taxes.

The Company shall withhold such amounts from any compensation or other benefits payable to you under this Letter Agreement on account of payroll and other taxes as may be required by applicable law or regulation of any governmental authority. You hereby acknowledge and agree that you are responsible for the review with your own personal tax advisors the federal, state, local and foreign (if applicable) tax consequences of any grant or transactions contemplated by this Letter Agreement and you are relying solely on such advisors and not on any statements or representations of the Company or any of its agents with respect to any such tax consequences.  You (and not the Company) shall be responsible for your own tax liability that may arise as a result of any grants or transactions contemplated by this Letter Agreement.

18. Miscellaneous.

No provision of this Letter Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing signed by you and the Company.  No waiver by either party hereto of, or compliance with, any condition or provision of this Letter Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Letter Agreement.

19. Governing Law.

This Letter Agreement is being made and is intended to be performed in the State of Georgia, and shall be governed, construed, interpreted, and enforced in accordance with the substantive laws of the State of Georgia.

20. Counterparts.

  

  

  

 

This Letter Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same agreement.

21. Voluntary Agreement.

The parties acknowledge that each has had an opportunity to consult with an attorney or other counselor concerning the meaning, import, and legal significance of this Letter Agreement, and each has read this Letter Agreement, as signified by their respective signatures hereto, and each is voluntarily executing the same after, if sought, advice of counsel for the purposes and consideration herein expressed.

[signatures follow on next page]

 

 

 

  

  

  

To accept this offer, please sign and date this Letter Agreement in the space provided below and return it to me no later than October 1, 2009.  A second copy of the document has been provided for you to keep for your records.

 

 

Sincerely,

 

 

   /s/ HSW International, Inc.                        

    HSW International, Inc.

 

 

I accept this offer of employment with HSW International, Inc. and agree to the terms and conditions outlined in this letter.

 

 

 

         /s/ Eric Orme                                                                                                  October 1, 2009                                           

 

         By:  Eric Orme                                                                                               Dateex10_1leasegreement.htm

 

LEASE PURCHASE AGREEMENT

BETWEEN

FUELSTREAM, INC.

AND

MRINTERNATIONAL TRADING, INC.

May 10, 2010

 

 

 

  

  

Table of Contents

 

TABLE OF CONTENTS

 

	
1.

	  	
Definitions

	
1

	
2.

	  	
Lease of Acquired Assets

	
3

	
3.

	  	
Purchase and Sale

	
4

	
4.

	  	
MRIT’s Representations and Warranties

	
5

	
5.

	  	
Fuelstream’s Representations and Warranties

	
6

	
6.

	  	
Conditions to Obligation to Close

	
7

	
7.

	  	
Termination

	
8

	
8.

	  	
Indemnification

	
8

	
9.

	  	
Miscellaneous

	
8

	
  

	
Exhibit A—Escrow Agreement

	
  

	
Exhibit B – Description of Initial Assets

	
  

	
Exhibit C—Form of Bill of Sale

	
  

	
Exhibit D—Form of Employment Agreement

 

 

  

i

Table of Contents

 

LEASE PURCHASE AGREEMENT

 

 

This Lease Purchase Agreement (this "Agreement") is entered into as of May 10, 2010, by and between Fuelstream, Inc., a Delaware corporation ("Fuelstream"), and MRInternational Trading, Inc., a New York corporation ("MRIT"). Fuelstream and MRIT are referred to collectively herein as the "Parties."

 

This Agreement contemplates a transaction in which Fuelstream will purchase, in installments, certain assets of MRIT and lease such assets during the installment period.

 

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

 

1.  Definitions.

 

"Acquired Assets" means all right, title, and interest in and to the Initial Assets and the Secondary Assets.

 

"Affiliate" means, with respect to a Party, any Person who controls, is controlled by, or who is under common control with such Party.

 

"Assumed Liabilities" means only the Pre-Closing Docking Fees, but shall not include (i) any Liability of MRIT for Taxes incurred in relation to the Acquired Assets prior to the Closing Date, (ii) any Liability of MRIT for income, transfer, sales, use, and other Taxes arising in connection with the consummation of the transactions contemplated hereby (including any income Taxes arising because MRIT is transferring the Acquired Assets), (iii) any obligation of MRIT to indemnify any Person in connection with the use, operation, or ownership of the Acquired Assets (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise), or (iv) any Liability of MRIT for costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby.

 

"Closing" has the meaning set forth in §2(d) below.

 

"Closing Date" has the meaning set forth in §2(d) below.

 

"Code" means the Internal Revenue Code of 1986, as amended.

 

"Completion Date" means the date upon which the Final Installment is received by the Escrow Agent.

 

"Completion Payment Date" has the meaning set forth in §3(c)(iii).

 

"Controlled Group" has the meaning set forth in Code §1563.

 

"Environmental, Health, and Safety Requirements" shall mean all federal, state, local, and foreign statutes, regulations, ordinances, and other provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations, and all common law concerning public health and safety, worker health and safety, and pollution or protection of the environment, including, without limitation, all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances, or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise, or radiation, each as amended and as now or hereafter in effect.

 

"Escrow Agent" has the meaning set forth in §2(c) below.

 

  

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"Escrow Agreement" means the Escrow Agreement entered into concurrently herewith and attached hereto as Exhibit A.

 

"First Installment" has the meaning set forth in §3(c)(i) below.

 

"First Installment Date" has the meaning set forth in §3(c)(i) below.

 

"Final Installment" means the difference between the Purchase Price and the sum of: (i) the Initial Installment; and (ii) any Interim Installments.

 

"Fuelstream" has the meaning set forth in the preface above.

 

"Fuelstream Shares" means shares of common stock of Fuelstream, par value $0.001 per share.

 

"Initial Assets" means one (1) tank barge and one (1) tugboat, descriptions and photographs of which are attached hereto as Exhibit “B.”

 

"Interim Installment" means any single payment or series of payments made by Fuelstream to the Escrow Agent, subsequent to the Initial Installment but prior to the Final Installment.

 

"Liability" means any liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

 

"Lien" means any mortgage, pledge, lien, encumbrance, charge, or other security interest.

 

"MRIT" has the meaning set forth in the preface above.

 

"Operational Date" means date at which the Initial Assets are commercially deployed pursuant to a bona fide agreement to transport and deliver fuel.

 

"Partial Completion Date" means the date upon which Fuelstream has delivered not less than an aggregate of Six Hundred Thousand Dollars ($600,000) to the Escrow Agent.

 

"Party" has the meaning set forth in the preface above.

 

"Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity, or a governmental entity (or any department, agency, or political subdivision thereof).

 

"Pre-Closing Docking Fees" means all docking fees relating to or arising from the Acquired Assets incurred prior to the Closing Date, not to exceed Twenty Four Thousand Dollars ($24,000).

 

"Purchase Price" has the meaning set forth in §3(c) below.

 

"Relevant Date" means the date upon which either Party hereto is either: (i) obligated to deliver consideration to, or (ii) entitled to receive consideration from, the Escrow Agent.

 

"Secondary Assets" has the meaning set forth in §3(g)(iii) below.

 

"Tax" or "Taxes" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, profits, withholding, social security (or similar), unemployment, disability, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalty, or addition thereto, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other Person.

 

  

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2. Lease of Acquired Assets.

 

(a) Grant of Lease.  MRIT hereby leases the Acquired Assets to Fuelstream, for the consideration specified in this Section 2 (referred herein as the “Lease”), for a period commencing on the Closing Date and continuing until the Completion Date (the “Lease Period”).

 

(b) Lease Payment.  Commencing on the Operational Date and continuing eighteen (18) months thereafter (“Lease Payment Period”), MRIT shall receive ten percent (10%) of the net revenues associated with the operation of the Acquired Assets, payable on a monthly basis by wire transfer according to instructions given by MRIT (“Net Revenue Interest”).  For purposes of this Agreement, “net revenues” shall mean cash consideration received by Fuelstream that is directly and substantially attributable to the use or operation of the Acquired Assets less all other items normally included in determining cost of goods sold (or cost of sales, as applicable) of similar enterprises under United States generally accepted accounting principles.  The Net Revenue Interest described in this Section 2(b) shall continue for the entire Lease Payment Period regardless of the termination of the lease or the end of the Lease Period hereunder.  For the avoidance of doubt, for example, if the Lease Period terminates on the sixth month from the Closing Date because Fuelstream has made the Completion Payment, the Net Revenue Interest shall continue to be payable to MRIT with respect to all of the Acquired Assets for an additional twelve months.

 

(c) Security.  MRIT shall be responsible for the execution, delivery, and filing of UCC 1 financing statements under the Uniform Commercial Code, showing MRIT as secured party, Fuelstream as debtor, and providing notice of the Lease.

 

(d) Maintenance and Operation. Fuelstream shall not remove, alter, disfigure, or cover up any numbering, lettering, or insignia displayed upon the Acquired Assets, and shall see that the Acquired Assets are not subjected to careless or needlessly rough usage; and it shall, at its own expense unless otherwise stated, maintain the Acquired Assets and its appurtenances in good repair and operative condition.

 

(e)  Fees and Expenses.  Following the Closing Date, Fuelstream shall pay any and all fees and expenses in connection with the use, storage, docking, and operation of the Acquired Assets, including  but not limited to, docking fees, registration fees, license fees and other costs.

 

(f) Supplying Operators.  Subsequent to the Closing Date, Fuelstream shall supply and pay all operators of Acquired Assets during the Lease Period (and thereafter following the Completion Date) and shall provide and pay for all worker's compensation insurance and pay all payroll taxes required by law and applying to such operators and workers when operators are employees of Fuelstream.

 

(g) Repairs.   The expense of all repairs made during the Lease Period, including labor, material, parts, and other items, shall be paid by Fuelstream.

 

(h) Insurance.  Fuelstream shall maintain in full force throughout the Lease Period at its expense: (i) adequate public liability and property damage insurance and standard fire and extended coverage insurance to cover the full replacement cost of the Acquired Assets; and (ii) adequate workers compensation coverage and bond and surety arrangements to cover the operation of the Acquired Assets.  In the event of damage or destruction to the Acquired Assets, the proceeds of such insurance shall be available for the repair or replacement of the Acquired Assets.

 

(i) Default.  In the event that Fuelstream fails to pay any sum payable hereunder within thirty (30) days after the date such payment is due, MRIT shall then, and at any time thereafter, have the right to (i) proceed by court action or other actions in law or in equity to enforce this Lease and recover from Fuelstream any and all damages and expenses, together with interest thereon at the rate of eighteen percent (18%) per annum, or the highest legal rate of interest, whichever is lower, from the date such amounts are due until paid, and (ii) without notice or demand, accelerate the balance of Net Revenue Interest thereafter accruing under the Lease, which, together with all other amounts then due under this Agreement, shall become immediately due and payable as liquidated damages and not as a

 

  

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penalty.

 

(j) Indemnification.  During the Term of the Lease, each Party agrees to indemnify, hold harmless and defend the other from all claims, actions, liabilities, damages, expenses and judgments (including but not limited to attorneys' fees, reasonable investigative and discovery costs and all other sums) on account of such Party's breach of the Lease and any injury to persons, loss of life or damage to property occurring with respect to the Acquired Assets arising out of such Party's negligent actions or negligent failure to act.  The rights of indemnification shall be in addition to all other rights of the Parties under this Agreement, including, without limitation, the rights of indemnification provided in §8 below.

 

3. Purchase and Sale.

 

(a) Purchase and Sale of Assets.  On and subject to the terms and conditions of this Agreement, Fuelstream agrees to purchase from MRIT, and MRIT agrees to sell, transfer, convey, and deliver to Fuelstream, all of the Acquired Assets for the consideration specified below in this §3.

 

(b) Assumption of Liabilities.  On and subject to the terms and conditions of this Agreement, Fuelstream agrees to assume and become responsible for all Assumed Liabilities at the Closing. Fuelstream will not assume or have any responsibility, however, with respect to any other obligation or Liability of MRIT not included within the definition of Assumed Liabilities.

 

(c) Purchase Price. Fuelstream agrees to pay to MRIT One Million Two Hundred Thousand Dollars (the “Purchase Price”) payable as follows:

 

(i) on or before the sixtieth day from the Closing Date (the “First Installment Date”), Fuelstream shall deliver to the Escrow Agent, by wire transfer or other immediately available funds, Three Hundred Thousand Dollars ($300,000) (the “First Installment”);

 

(ii) at any time following the First Installment Date but prior to the payment of the Final Installment, Fuelstream may deliver to the Escrow Agent an Interim Installment; and

 

(iii) on or before the twelve month anniversary of the Closing Date (the “Completion Payment Date”), Fuelstream shall deliver to the Escrow Agent, by wire transfer or other immediately available funds, the Final Installment.

 

(d) Election to Convert.  Prior to the delivery of the Final Installment as described in §3(c)(iii) above, MRIT shall have the option to convert any or all of the unpaid portion of the Purchase Price into shares of common stock of Fuelstream at a conversion price of $0.50 per share.

 

(e) Escrow. The Parties hereby agree that the delivery of the Purchase Price and the exchange of documentation in connection herewith (including the election of MRIT to convert into Fuelstream common stock as described in the preceding section) shall be governed by that certain Escrow Agreement (“Escrow Agreement”) among MRIT, Fuelstream, and [counsel to Grantor] (the “Escrow Agent”), substantially in the form attached hereto as Exhibit “A.”

 

(f) Closing.  The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Fuelstream on such date as the Parties may mutually determine (the "Closing Date").

 

(g) Deliveries

 

(i) at the Closing, the Parties will deliver to the Escrow Agent the various certificates, instruments, and documents referred to in the Escrow Agreement;

 

(ii) at the First Installment Date and the Completion Date, Fuelstream shall deliver the First Installment and the Final Installment, respectively, as described in §3(c)above;

 

(iii) within thirty (30) days of the Partial Completion Date, MRIT shall acquire

 

  

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and deliver to the Escrow Agent valid and marketable title to: one (1) additional tugboat and one (1) additional tank barge of similar quality, age, and capacity as the Initial Assets (the “Secondary Assets”);

 

(iv) at the Partial Completion Date and the Completion Date, the Escrow Agent shall deliver to Fuelstream the respective bills of sale and documents of title to the Initial Assets and the Secondary Assets, respectively, as set forth in the Escrow Agreement.

 

(h) Allocation.  Fuelstream shall prepare an allocation of the Purchase Price (and all other capitalized costs) among the Acquired Assets in accordance with Code §1060 and the Treasury regulations thereunder (and any similar provision of state, local or foreign law, as appropriate), which allocation shall be binding upon MRIT. Fuelstream shall deliver such allocation to MRIT within 60 days after the Closing Date. Fuelstream and MRIT and their Affiliates shall report, act and file federal income tax returns (including, but not limited to Internal Revenue Service Form 8594) in all respects and for all purposes consistent with such allocation prepared by Fuelstream. MRIT shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as Fuelstream may reasonably request to prepare such allocation. Neither Fuelstream nor MRIT shall take any position (whether in audits, tax returns or otherwise) which is inconsistent with such allocation unless required to do so by applicable law.

 

4.  MRIT's Representations and Warranties.  MRIT represents and warrants to Fuelstream that the statements contained in this §4 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date and any subsequent Relevant Date.

 

(a) Authorization of Transaction.  MRIT has full power and authority (including full corporate power or other entity and authority) to execute and deliver this Agreement and to perform its obligations hereunder. Without limiting the generality of the foregoing, the board of directors of MRIT and the shareholders of MRIT have duly authorized the execution, delivery, and performance of this Agreement by MRIT. This Agreement constitutes the valid and legally binding obligation of MRIT, enforceable in accordance with its terms and conditions.

 

(b) Non-contravention.  Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which MRIT is subject or any provision of the charter or bylaws of MRIT or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which MRIT is a party or by which it is bound or to which any of the Acquired Assets are subject (or result in the imposition of any Lien upon any of the Acquired Assets). MRIT does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement.

 

(c) Title to Assets.  MRIT has good and marketable title to all of the Acquired Assets, free and clear of any Liens or restriction on transfer.

 

(d) Undisclosed Liabilities.  Other than the Docking Fee, there is no Liability with respect to the Acquired Assets.

 

(e) Tax and Registration Matters.  MRIT has paid any and all taxes and fees relating to the ownership operation, or registration of Acquired Assets

 

(f) Environmental, Health, and Safety Matters.

 

(i) With respect to the operation, use, and ownership of the Acquired Assets,

 

  

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MRIT has complied and is in compliance with all Environmental, Health, and Safety Requirements and has obtained and complied with, and is in compliance with, all permits, licenses and other authorizations that are required pursuant to Environmental, Health, and Safety Requirements for the operation, use, and ownership of the Acquired Assets.

 

(ii) With respect to the Acquired Assets, MRIT has not received any written or oral notice, report or other information regarding any actual or alleged violation of Environmental, Health, and Safety Requirements, or any Liabilities or potential Liabilities, including any investigatory, remedial or corrective obligations, relating to any of them or its facilities arising under Environmental, Health, and Safety Requirements.

 

(iii) MRIT has not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, or released any substance, including without limitation any hazardous substance, or owned or operated any property or facility (and no such property or facility is contaminated by any such substance) in a manner that has given or would give rise to Liabilities, including any Liability for response costs, corrective action costs, personal injury, property damage, natural resources damages or attorney fees, pursuant to any Environmental, Health, and Safety Requirements.

 

(g) Investment. To the extent that MRIT converts any portion of the Purchase Price into Fuelstream Shares, MRIT (A) understands that the Fuelstream Shares have not been, and will not be, registered under the Securities Act of 1933, or under any state securities laws, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Fuelstream Shares solely for its own account for investment purposes, and not with a view to the distribution thereof, (C) is managed and directed by a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning Fuelstream and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Fuelstream Sahres, (E) is able to bear the economic risk and lack of liquidity inherent in holding the Fuelstream Shares, and (F) is an “accredited investor” as that term is defined under the Securities Act of 1933.

 

(h) Disclosure.  The representations and warranties contained in this §3 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this §3 not misleading.

 

5. Fuelstream's Representations and Warranties.  Fuelstream represents and warrants to MRIT that the statements contained in this §5 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date.

 

(a) Organization of Fuelstream.  Fuelstream is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

 

(b)  Authorization of Transaction.  Fuelstream has full power and authority (including full corporate or other entity power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Fuelstream, enforceable in accordance with its terms and conditions. The execution, delivery and performance of this Agreement and all other agreements contemplated hereby have been duly authorized by Fuelstream.

 

(c)  Non-contravention.  Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Fuelstream is subject or any provision of its charter, bylaws, or other governing documents or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease,

 

  

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license, instrument, or other arrangement to which Fuelstream is a party or by which it is bound or to which any of its assets is subject. Fuelstream does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement.

 

6. Conditions to Obligation to Close.

 

(a) Conditions to Fuelstream's Obligation.  Fuelstream's obligation to consummate the transactions to be performed by it in connection with this Agreement is subject to satisfaction of the following conditions:

 

(i) the representations and warranties set forth in §4 above shall be true and correct in all material respects at and as of the Closing Date and any subsequent Relevant Date;

 

(ii) MRIT shall have performed and complied with all of its covenants hereunder in all material respects through the Closing Date and each subsequent Relevant Date;

 

(iii) no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) affect adversely the right of Fuelstream to own the Acquired Assets;

 

(iv) all actions to be taken by MRIT in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to Fuelstream;

 

(v) no damage or destruction or other change has occurred with respect to the Initial Assets prior to the Closing Date or, with respect to the Secondary Assets, prior to the Partial Completion Date that, individually or in the aggregate, would materially impair the use of the Acquired Assets;

 

(vi) Moses Rambarran shall have entered into an employment agreement with Fuelstream, substantially in the form attached hereto as Exhibit “D”, and such agreement shall be in full force and effect as of the Closing;

 

Fuelstream may waive any condition specified in this §6(a) if it executes a writing so stating at or prior to the Closing.

 

(b)  Conditions to MRIT's Obligation.  MRIT's obligation to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

 

(i) the representations and warranties set forth in §5 above shall be true and correct in all material respects at and as of the Closing Date and any subsequent Relevant Date;

 

(ii) Fuelstream shall have performed and complied with all of its covenants hereunder in all material respects through the Closing Date and any subsequent Relevant Date;

 

(iii) no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) affect adversely the right of MRIT to sell the Acquired Assets; and

 

(iv) all actions to be taken by Fuelstream in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents

 

  

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required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to MRIT.

 

MRIT may waive any condition specified in this §6(b) if it executes a writing so stating at or prior to the Closing.

 

7. Termination.

 

(a) Termination of Agreement.  Certain of the Parties may terminate this Agreement as provided below:

 

(i) Fuelstream and MRIT may terminate this Agreement by mutual written consent at any time prior to any Relevant Date;

 

(ii) Fuelstream may terminate this Agreement by giving written notice to MRIT at any time prior to the Relevant Date in the event MRIT has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Fuelstream has notified MRIT of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach; and

 

(iii) MRIT may terminate this Agreement by giving written notice to Fuelstream at any time prior to the Relevant Date in the event Fuelstream has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, MRIT has notified Fuelstream of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach.

 

(b) Effect of Termination. If this Agreement is terminated pursuant to §7(a) above, the following shall apply:

 

(i) if this Agreement is terminated due a material breach by Fuelstream, then upon written demand by MRIT, Fuelstream shall pay the following to MRIT within thirty (30) days of such demand:

 

(A) the unpaid portion of the Purchase Price; and

 

(B) the unpaid portion of the Net Revenue Interest, calculated by multiplying  (x) the number of months remaining on the Lease Payment Period as of the date of breach, by (y) the average monthly Net Revenue Interest for the five month period (or such shorter period if the breach occurred within five months of the Closing Date) immediately prior to the breach.

 

(ii) if this Agreement is terminated due to a material breach of MRIT, then the indemnification provisions in §8 shall apply.

 

8. Indemnification.  In addition to such rights of indemnification in connection with the Lease as provided in §2(j) above, each Party, to the fullest extent permitted by law, shall indemnify, defend, and hold the other Party and its Affiliates, officers, directors, trustees, partners, members, principals, employees, and agents (each, an “Indemnitee”) from and against any and all Losses arising from any and all claims, demands,  or Proceedings in which an Indemnitee may be involved, or threatened to be involved, as a party or otherwise, arising out of or incidental to this Agreement, regardless of whether this Agreement is in force or effect at the time any such liability or expense is paid or incurred and regardless of whether or not any matter giving rise to  indemnification hereunder was known by any such Indemnitee prior to the date of this Agreement, provided however, that the obligations of Fuelstream or its Affiliates shall collectively be limited to the unpaid portion, if any, of the Purchase Price and the unpaid portion, if any, of the Net Revenue Interest.

 

9.  Miscellaneous.

 

(a)  Survival of Representations and Warranties.  All of the representations and warranties of the Parties contained in this Agreement shall survive the Closing.

 

  

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(b)  No Third-Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

 

(c)  Entire Agreement.  This Agreement (including the documents referred to herein) constitutes the entire agreement between the Parties and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

 

(d)  Succession and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party; provided, however, that Fuelstream may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases Fuelstream nonetheless shall remain responsible for the performance of all of its obligations hereunder).

 

(e)   Counterparts.  This Agreement may be executed in one or more counterparts (including by means of facsimile), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

(f)   Headings.  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

(g)  Notices.  All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid), (iii) one business day after being sent to the recipient by facsimile transmission or electronic mail, or (iv) four business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:

 

	
If to MRIT:

 

 

	
If to Fuelstream:

	
Attn: Mr. Moses Rambarran

	
Attn: Mr. Mark Klok

	
85 Main Street, Suite 202

	
10757 South River Front Pkwy, Suite 125

	
Hackensack, New Jersey 07601

	
South Jordan, Utah 84095

	
T +1  ______________

	
T +1 801 816 2500

	
F +1  ______________

	
F +1 801 816 2599

	
email: moses@rambarranlawfirm.com

	
email: mdklok@gmail.com

 

Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

 

(h)  Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

(i) Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

  

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(j)  Expenses.  Each of Fuelstream and MRIT will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

 

(k)    Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.  Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation.

 

(l)  Incorporation of Exhibits.  The Exhibits identified in this Agreement are incorporated herein by reference and made a part hereof.

 

(m)  Specific Performance.  Each Party acknowledges and agrees that the other Party would be damaged irreparably in the event any provision of this Agreement not performed in accordance with its specific terms or otherwise is breached, so that a Party shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in addition to any other remedy to which such Party may be entitled, at law or in equity.

 

(n)  Submission to Jurisdiction. Each of the Parties submits to the jurisdiction of any state or federal court sitting in New York City in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto.  Each Party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or in equity.

 

 

 

 

 

* * * * *

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

 

	
MRInternational Trading, Inc.

	  	
Fuelstream, Inc.

	  	  	  
	  	  	  
	
By: /s/ Mark Klok

	  	
By: /s/ Moses Rambarran

	  	  	  
	  	  	  
	
Title: Chief Executive Officer

	  	
Title: President

 

 

 

 

  

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