Document:

bellapetrellas1ex101_82910.htm

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into by and between Bella Petrella’s Holdings, Inc., a Florida corporation, (the “Company”), and _______________ (“Employee”) effective as of ________________, 2010 ("Start Date").

 

RECITAL

 

The Company desires to employ Employee, and Employee is willing to accept employment by the Company, on the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

Section 1.  Position.  During the term of this Agreement, Employee agrees to be employed by and to serve the Company as _______________, to perform such duties consistent with such position and as may be assigned to him from time to time by the Board of Directors.  Employee’s principal place of business with respect to his services to the Company shall be __________________; provided, that Employee agrees to undertake such travel as may be required in the performance of his duties.  All travel expenses of Employee shall be reimbursed in accordance with Section 13(c) below.

 

Section 2.  Supervision and Direction. Employee shall carry out his duties under the general supervision and direction of and shall report to the Board of Directors of the Company in accordance with the Company’s policies, rules and procedures in force from time to time.

 

Section 3.  Time Required.  Employee shall devote his full time, attention, skill and efforts to his tasks and duties hereunder to the affairs of the Company.  Without the prior written consent of the Company, Employee shall not provide services for compensation to any other person or business entity during the Term of his employment by the Company, as defined in Section 4, or engage in any other business activity, whether or not such other business activity is pursued for profit or pecuniary advantage unless approved by the Board of Directors, provided, that investing in the public stock market for his personal account and benefit shall not be deemed "business activity" for purposes of this Section.

 

Section 4.  Term of Employment. The term of employment under this Agreement (the “Term”) shall begin on Start Date and shall continue through ___ calendar years after the Start Date (the last day of such ____-year period being the “Expiration Date”), unless earlier terminated in accordance with Section 10 or extended pursuant to the following sentence.  Unless written notice is given by the Company or by Employee to the other at least ninety days prior to the Expiration Date (or any later date to which the Term shall have been extended in accordance with this Section 4) advising that the one giving such notice does not desire to extend or further extend this Agreement, the Term shall automatically be extended for additional, successive one-year periods without further action of either the Company or Employee.

 

_______       _______

Int.           Int.

  

Exhibit 10.1 Page 1

  

 

Section 5.  Termination for Cause. Termination for Cause (as defined in Section 10) may be effected by the Company at any time during the Term of this Agreement and shall be effected following approval by the Board of Directors by written notification to Employee from the Chairman of the Board of Directors or by action of a majority of the directors, in the event Employee is the Chairman, stating the reason(s) for termination.  Such termination shall be effective immediately upon the giving of such notice, unless the Board of Directors shall otherwise determine.  Upon Termination for Cause, Employee shall be paid all accrued salary, any benefits under any plans of the Company in which Employee is a participant to the full extent of Employee’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Employee in connection with his duties hereunder prior to such termination, all to the date of termination, but Employee shall not be entitled to any other compensation or reimbursement of any kind, including without limitation, severance compensation.

 

Section 6.  Voluntary Termination.  In the event of a Voluntary Termination (as defined in Section 10), the Company shall pay to Employee all accrued salary, bonus compensation to the extent earned, any benefits under any plans of the Company in which Employee is a participant to the full extent of Employee’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Employee in connection with his duties hereunder, all to the date of termination, but no other compensation or reimbursement of any kind, including without limitation, severance compensation.  Employee may affect a Voluntary Termination by giving sixty days’ prior written notice of such termination to the Company.

 

Section 7.  Termination by Death.  In the event of Employee’s death during the Term of this Agreement, Employee’s employment shall be deemed to have terminated as of the last day of the month during which his death occurs and the Company shall pay to his estate or such beneficiaries, as Employee may from time to time designate, all accrued salary, any benefits under any plans of the Company in which Employee is a participant to the full extent of Employee’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Employee in connection with his duties hereunder, all to the date of termination, but Employee’s estate shall not be paid any other compensation or reimbursement of any kind, including without limitation, severance compensation.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 2

  

Section 8.  Termination by Reason of Disability.  If, during the Term of this Agreement, a physician selected by the Company certifies that Employee has become physically or mentally incapacitated or unable to perform his full-time duties under this Agreement, and that such incapacity has continued for a period of 180 calendar days within any period of 365 consecutive days, the Company shall have the right to terminate Employee’s employment hereunder by written notification to Employee, and such termination shall be effective on the seventh day following the giving of such notice (“Termination by Reason of Disability”).  In such event, the Company will pay to Employee all accrued salary, any benefits under any plans of the Company in which Employee is a participant to the full extent of Employee’s rights under such plans, accrued vacation pay, any appropriate business expenses incurred by Employee in connection with his duties hereunder, all to the date of termination, and all severance compensation required under Section 4, but Employee shall not be paid any other compensation or reimbursement of any kind.  In the event of a Termination by Reason of Disability, upon the termination of the disability, the Company will use its best efforts to reemploy Employee, provided that such reemployment need not be in the same capacity or at the same salary or benefits level as in effect prior to the Termination by Reason of Disability.

 

Section 9.  Employee’s Obligation Upon Termination.  Upon the Termination of Employee’s employment for any reason, Employee shall within ten days of such termination return to the Company all personal property and proprietary information in Employee’s possession belonging to the Company.  Unless and until Employee has complied with this Section (which shall be determined by the Company's standard termination and check-out procedures), the Company shall have no obligation to make any payment of any kind to Employee hereunder.

 

Section 10.  Definitions.  For purposes of this Agreement the following terms shall have the following meanings:

 

(a)  “Termination for Cause” shall mean termination by the Company of Employee’s employment by the Company by reason of:

 

(i)  Employee’s willful dishonesty towards, fraud upon, or deliberate injury or attempted injury to, or breach of fiduciary duty to, the Company;

 

(ii)  Employee’s material breach of this Agreement, including any Exhibit hereto, or any other agreement to which Employee and the Company are parties;

 

(iii)  Employee’s use or possession of illegal drugs at any time, use of alcoholic beverages during working hours or on Company property except when specifically allowed by a company sponsored function, illegal use of prescription drugs during working hours or on Company property or Employee reporting to work (which includes activities away from Company offices) under the influence of illegal drugs, alcohol or illegal use of prescription drugs;

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 3

  

 

(iv)  Conduct by Employee, whether or not in connection with the performance of the duties contemplated hereunder, that would result in serious prejudice to the interests of or embarrassment to the Company if Employee were to continue to be employed, including, without limitation, the conviction of a felony or a good faith determination by the Board of Directors that Employee has committed acts involving moral turpitude;

 

(v)  Any material violation of any rule, regulation or policy of the Company by Employee or Employee’s failure to follow reasonable instructions or directions of the Board of Directors of the Company (as it relates to the Employee’s written job description) or any policy, rule or procedure of the Company in force from time to time; provided, that Employee shall have fifteen days to cure such violation upon written notice of his violation described in reasonable detail.  Any changes to Company policies, rules and procedures must be provided to Employee in writing ten days prior to the changes becoming effective.

 

(b)  “Voluntary Termination” shall mean termination by Employee of Employee’s employment other than (i) Termination by Reason of Disability and (ii) Termination by reason of Employee’s Death.

 

Section 11.  Base Salary.  As compensation for the services to be rendered by Employee to the Company as provided in Section 1, and subject to the terms and conditions of Section 2, the Company agrees to pay to Employee an annual “Base Salary Rate” in accordance with the Company’s regular payroll practices (_________) of  $__________________.  The Base Salary Rate and Employee’s performance shall be reviewed by the Company’s Board of Directors on an annual basis, from and after the Start Date, for a determination of whether an increase in Employee’s Base Salary Rate should be made, which adjustment shall be in sole discretion of the Company’s Board of Directors.

 

Section 12.  Bonus.  The Board of Directors may establish a goal or goals for the Company each year, which may include a target revenue goal, consummation of a merger with a candidate, asset base, etc.  Employee shall be considered for a bonus for achievement the goal or goals established by the Board.

 

Section 13.  Additional Benefits.  During the Term of this Agreement, Employee shall be entitled to the following benefits, in addition to Base Salary:

 

(a)  Employee Benefits.  Employee shall be included in all group insurance plans and other benefit plans and programs made available to management employees of the Company.

 

(b)  Vacation.  Employee is entitled to take _______ weeks paid vacation within one year from his Starting Date and each twelve month period thereafter.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 4

  

 

(c)  Reimbursement for Expenses.  The Company shall reimburse Employee for reasonable out-of-pocket business, travel and entertainment expenses incurred by Employee in connection with his duties under this Agreement in accordance with the Company’s reimbursement policy in effect from time to time.  To receive reimbursement, the Employee must submit a monthly, written expense report, attaching receipts thereto, listing all expenses to be reimbursed, the amount of each, the business purpose or benefit of the expense and such other information as may be required to satisfy the requirements of the Internal Revenue Code for deduction of such expenses by the Company.  Any changes to Company’s policy must be provided to Employee in writing thirty days prior to the changes becoming effective.

 

(d)  Automobile Allowance.  The Company shall pay to or for the benefit of Employee an automobile allowance of $____ per month, which may include a vehicle lease payments for an automobile selected by Employee and leased by the Company; provided, that in the event a cash payment is required for a leased vehicle, the cash payment shall be amortized over the lease term for purposes of the monthly automobile allowance provided herein.

 

Section 14.  Other Agreements.  Employee agrees that to induce the Company to enter into this Agreement, he has concurrently executed and delivered to the Company (a) an Employee Non-Disclosure Agreement and Proprietary Rights Assignment dated as of event date herewith, in the form of Exhibit A hereto, and (b) a Non-Solicitation and Non-Competition Agreement dated as of even date herewith, in the form of Exhibit B hereto.  Employee hereby covenants and agrees to fully abide by each and every term of such agreements, and agrees and understands that a breach or violation by Employee of any provision of either of such agreements shall constitute grounds for Termination for Cause, and that no such termination shall limit or affect any other rights and remedies of the Company arising out of or in connection with any such breach or violation.  The covenants on the part of Employee contained in such agreements shall survive termination of this Agreement, regardless of the reason for such termination, unless specifically excluded by this Agreement.  Employee hereby represents and acknowledges that the Company is relying on the covenants contained in such agreements in entering into this Agreement, and that the terms and conditions of the covenants contained in such agreements are fair and reasonable.

 

Section 15.                              Notices.  Any and all notices or other communications required or permitted to be given under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered (excluding telephone facsimile and including receipted express courier and overnight delivery service) or mailed by first class certified U.S. mail, return receipt requested showing name of recipient, addressed to the proper party.  For purposes of sending notices under this Agreement, the addresses of the parties are set forth in the first paragraph of this Agreement.  A party may change its or his address for notices by sending a notice of such change to all other party by the means provided herein.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 5

  

 

Section 16.  Entire agreement.  This writing constitutes the entire agreement of the parties with respect to the subject matter hereof, superseding all prior agreements, understandings, representations and warranties, except for the Stock Purchase and Sale of Agreement, a Consulting Agreement between the Client and the Consultant and a Bill of Sale from the Consultant to the Client.

 

Section 17.  Waivers.  No waiver of any provision, requirement, obligation, condition, breach or default hereunder, or consent to any departure from the provisions hereof, shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

 

Section 18.  Amendments.  This Agreement may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by all of the parties hereto and amendment, modification or alteration of, addition to or termination of this Agreement or any provision of this Agreement shall not be effective unless it is made in writing and signed by the parties.

 

Section 19.  Withholdings.  All compensation and benefits to Employee hereunder shall be subject to all applicable federal, state, local and other withholdings and similar taxes and other payments required by applicable law.

 

Section 20.  Remedies.  All rights and remedies of the Company and of the Employee hereunder shall be cumulative and the exercise of any right or remedy shall not preclude the exercise of another.

 

Section 21.  Arbitration.  Any controversy or claim arising out of or relating to this agreement, or breach thereof (other than any action by the Company seeking an injunction or equitable relief under the Employee Non-Disclosure Agreement and Proprietary Rights Assignment or the Non-Solicitation and Non-Competition Agreement executed by the Employee, as amended from time to time) shall be settled by binding arbitration to be held in Tampa, Florida, in accordance with the Rules of the American Arbitration Association, and judgment upon any proper award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  There shall be three arbitrators, one to be chosen directly by each party at will, and the third arbitrator to be selected by the two arbitrators so chosen.  To the extent permitted by the rules of the American Arbitration Association, the selected arbitrators may grant equitable relief.  Each party shall pay the fees of the arbitrator selected by him and his own attorneys, and the expenses of his witnesses and all other expenses connected with the presentation of his case.  The cost of the arbitration including the cost of the record of transcripts thereof, in any, administrative fees, and all other fees and cost shall be borne equally by the parties.  The rules of discovery of the Federal District Court for the Middle District of Florida shall govern discovery conducted by the parties, who shall have the right to apply to said court for enforcement thereof.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 6

  

 

Section 22.  Construction.  This Agreement has been negotiated by the parties, section by section, and no provision hereof shall be construed more strictly against one party than against the other party by reason of such party having drafted such provision.  The order in which the provisions of this Agreement appear are solely for convenience of organization; and later appearing provisions shall not be construed to control earlier appearing provisions.

 

Section 23.  Invalidity.  It is the intent of the parties that each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law.  If any provision hereof shall be prohibited, invalid, illegal or unenforceable, in any respect, under applicable law, such provision shall be ineffective to the extent of such prohibition, invalidity or non enforceability only, without invalidating the remainder of such provision or the remaining provisions of this Agreement; and, there shall be substituted in place of such prohibited, invalid, illegal or unenforceable provision a provision which nearly as practicable carries out the intent of the parties with respect thereto and which is not prohibited and is valid, legal and enforceable.

 

Section 24.  Multiple counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be an original and, taken together, shall be deemed one and the same instrument.

 

Section 25.  Assignment, parties and binding effect.  This Agreement, and the duties and obligations of any party shall not be assigned without the prior written consent of the other party.  This Agreement shall benefit solely the named parties and no person shall claim, directly or indirectly, benefit hereunder, express or implied, as a third-party beneficiary, or otherwise.  Wherever in this Agreement a party is named or referred to, the successors (including heirs and personal representative of individual parties) and permitted assigns of such party shall be deemed to be included, and all agreements, promises, covenants and stipulations in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns.

 

Section 26.  Jurisdiction and venue.  Any action or proceeding for enforcement of this Agreement and the instruments and documents executed and delivered in connection herewith which is determined by a court of competent jurisdiction not, as a matter of law, which seeks injunctive relief shall be brought and enforced in the courts of the State of Florida in and for Hillsborough County, and the parties irrevocably submit to the jurisdiction of each such court in respect of any such action or proceeding.

 

Section 27.  Applicable law.  This Agreement and all amendments thereof shall be governed by and construed in accordance with the law of the State of Florida applicable to contracts made and to be performed therein (not including the choice of law rules thereof).

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 7

  

 

IN WITNESS WHEREOF, the parties have signed this Agreement effective the Start Date.

 

	
[insert name of employee]

	
Bella Petrella’s Holdings, Inc.

 

	
_____________________________

	
By:  ________________________________

	  	
    _________________, President

______      _______

Int.          Int.

  

Exhibit 10.1 Page 8

  

 

EXHIBIT "A"

 

EMPLOYEE NON-DISCLOSURE AGREEMENT

AND PROPRIETARY RIGHTS ASSIGNMENT

 

In return for new or continued employment by Bella Petrella’s Holdings, Inc.  ("Company "), the undersigned, ____________, (“Employee”) agrees as follows:

 

Section 1.  I agree during the Term of my employment to promptly disclose and describe to the Company all ideas, inventions, improvements, discoveries, enhancements, modifications, technical developments, and works of authorship (including all writings, computer programs, software and firmware), whether or not patentable or copyrightable, and whether in oral, written, or in machine readable form, which relate to or may be deemed to be useful to the Company’s business as presently conducted or as it may be conducted in the future, which are conceived, reduced to practice, or authored by me, solely or jointly with others, at any future time within the scope of my employment or with the use of the Company’s time, material, facilities or funds (the “Work Product”).

 

Section 2.  I hereby assign to the Company my entire right to all of the Work Product and agree that the Work Product is and will be the sole and exclusive property of the Company.  I will not, however, be required to assign to the Company any invention that I developed entirely on my own time without using the Company’s funds, equipment, materials or facilities, unless such invention either:  (i) relates to the Company’s business or actual or demonstrably anticipated research or development of the Company, or (ii) results from or is related to or suggested by any Company research, development or other activities, including without limitation any work performed by me for the Company.  I agree to take any acts and to execute any documents that the Company reasonably requests in order to evidence any assignment that I am required to make under this paragraph.  Except for any written agreement between the Company, and me I will not be entitled to any royalty, commission, or other payment or license or right with respect to the Work Product except as specifically agreed to in this agreement.

 

Section 3.  No Work Product will be made available by me to others during or following the term of my employment unless the Company consents in writing except as specifically agreed to in this agreement.

 

Section 4.  I hereby grant and agree to grant to the Company the right to obtain, for its benefit and in its name, patents and patent applications (including without limitation original, continuation, reissue, utility and design patents, patents of addition, confirmation patents, registration patents, utility models, etc., and all other types of patents and the like, and all renewals and extensions of any of them) for the Work Product in all countries.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 9

  

Section 5.  Both during and after the term of my employment, I will maintain in confidence, and will not disclosure or use or retain for my benefit or the benefit of anyone other than the Company any secret, proprietary or confidential information or trade secrets or know-how belonging to or in the possession of the Company (the “Proprietary Information”), except to the extent required to perform my assigned duties on behalf of the Company in my capacity as an Employee of the Company.  The Proprietary Information which I agree to maintain in confidence includes, but is not limited to, technical and business information relating to the Company’s inventions or products, research and development, finances, customers, marketing, future business plans, machines, equipment, services, systems, supply sources, cost of operations, business dealings, pricing methods, regulatory matters, software, contracts, contract performance, formulae, processes, business methods, and any information belonging to customers and suppliers of the Company which may have been disclosed to me as the result my being as an Employee of the Company.  My promise to maintain the confidentiality of the Proprietary Information will apply whether or not the Proprietary Information is in written or permanent form, whether or not is was developed by me or by others employed by the Company or was obtained by the Company from third parties, and whether or not the Proprietary Information has been identified by the Company as secret or confidential except as specifically agreed to in this agreement.

 

Section 6.  All records, reports, notes, compilations or other recorded matter, and any copies or reproductions thereof, that relate to the Company’s operations, activities, or business, which were made or received by me during the term of my employment (the “Company Materials”) are and shall continue forever to be the Company’s exclusive property, and I will keep the same at all times in the Company’s custody and subject to its control.  Upon termination of my employment or at the request of the Company before termination, I will deliver to the Company all written and tangible material in my possession incorporating the Work Product, the Proprietary Information and the Company Materials except as specifically agreed to in this agreement.

 

Section 7.  I agree to cooperate with the Company or its designees, both during and after the term of my employment, in procuring, maintaining and protecting the Company’s rights in the Work Product and the Proprietary Information, including without limitation patents and copyrights.  I will sign all papers which the Company deems necessary or desirable for the procurement, maintenance and protection of such rights.  I will keep and maintain adequate and current written records of all Work Product in the form of notes, sketches, drawings, or reports related to the Work product in the manner and form requested by the Company, and such records shall be and remain the property of the Company and be available to the Company at all times except as specifically agreed to in this agreement.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 10

  

 

Section 8.  There is no other contract or duty on my part now in existence to assign Work Product or that is inconsistent with this Agreement.  I will not disclose or induce the Company to use or bring onto the Company’s premises any confidential information or material that I am now aware of or become aware of which belongs to anyone other than the Company.  During my employment by the Company, I will not accept or engage in any employment, consulting, or other activity (a) detrimental or incompatible with my obligations to the Company, including without limitation my obligations under this Agreement, or (b) in any business competitive with the Company’s business as it is presently conducted or as it may be conducted at any future time during my employment.

 

Section 9.  I acknowledge that my obligations and promises under this Agreement are of a unique and intellectual character, which gives them particular value.  A breach of any of the promises or agreements contained herein will result in irreparable and continuing damage to the Company for which there will be no adequate remedy at law, and I agree that in addition to any other rights and remedies of the Company for such breach (including monetary damages, if appropriate), the Company is entitled to injunctive relieve and/or a decree for specific performance if I breach this Agreement.  All rights and remedies of the Company for a breach by me of this Agreement shall be cumulative and the exercise of any right or remedy by the Company will not preclude the exercise of another.

 

Section 10.  Unless there is a written employment agreement for a specified term in effect between the Company, and the Company or I may terminate my employment at any time, with or without cause, however, such termination will not affect the Company’s rights or my obligations under this Agreement except as specifically defined in this agreement.  This Agreement represents the entire understanding between me and the Company as to the subject matter hereof.  This Agreement may not be modified or amended except in a written document signed by me and the Company.  This Agreement shall inure to the benefit of the Company’s successors and assigns and shall be binding on my heirs, administrators and legal representatives.

 

Section 11.  If the Company waives a breach by me of any provision of this Agreement, such waiver shall not operate or be construed as a waiver of any other or subsequent breach by me.  If any provision of this Agreement is held to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way.

 

Section 12.  I agree that my promises contained in this Agreement are a material inducement to the Company’s giving me employment, that the matters I have agreed to are fair and reasonable under the circumstances, that any Proprietary Information I receive during the course of my employment may affect the effective and successful conduct of the Company’s business and goodwill, and that the proprietary Information is provided to me in confidence due to my employment and my need to know such information in order to completely and competently perform my duties and obligations on behalf of the Company.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 11

  

 

Section 13.  I agree that Sections 15 through 27 of my Employment Agreement with the Company is incorporated herein by this reference.

 

Section 14.  This Agreement shall be governed by and construed in accordance with the laws of the State of Florida.

 

In Witness Whereof, the undersigned have executed this Agreement on effective as of ________________, 2010 ("Start Date").

 

	
[insert name of employee]

	
Bella Petrella’s Holdings, Inc.

 

	
_____________________________

	
By:  ________________________________

	  	
    _________________, President

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 12

  

EXHIBIT "B"

 

Non-Solicitation and Non-Competition Agreement

 

This Non-Solicitation and Non-Competition Agreement (“Agreement”) is made and entered into as of the date set forth below, by ________________ (“Employee”) in favor and for the benefit of Bella Petrella’s Holdings, Inc., a Florida corporation (the “Company”).

 

RECITALS

 

In order to induce the Company to enter into and perform that certain Employment Agreement dated as of even date herewith between the Company and Employee (the “Employment Agreement” and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee hereby agrees as follows:

 

Section 1.  Non-Solicitation; Non-Competition.  The period from the Start Date through the Termination Date, as defined in Section 4 of the Employment Agreement, plus one year after the Termination Date is defined for this Agreement as the “Non-Competition Period”.  During the Non-Competition Period, Employee shall not, without the Company’s prior written consent, directly or indirectly, (a) engage in any business that competes with the Company’s business, (b) call on any person or entity who, at the time of such call, is a customer or supplier of the Company or any parent or subsidiary of the Company, with respect to the purchase of any goods or services which are, at the time, being offered by the Company or any parent or subsidiary of the Company or which are under development by the Company or any parent or subsidiary of the Company at the time of Employee’s employment, (c) solicit or induce or attempt to solicit or induce any customer of the Company or any parent or subsidiary of the Company to reduce, or take any action which would reduce, its business with the Company or any parent or subsidiary of the Company, (d) solicit or attempt to solicit any employees of the Company or any parent or subsidiary of the Company to leave the employ of the Company or any parent or subsidiary of the Company, or (d) hire any Employees or former Employees of the Company or any parent or subsidiary of the Company or cause any entity with which Employee is affiliated or in which Employee owns an equity interest to hire any such Employees or former Employees except as specifically defined in this agreement.  As used herein, the term “former employee” means a person who has been an employee of the Company or any parent or subsidiary of the Company within the twelve-month period prior to the date of determination.

 

Section 2.  Notice of Subsequent Employment.  Employee agrees that during the Non-Competition Period Employee will keep the Company informed of the names and addresses of all persons, firms or corporations by or for whom he is employed from time to time, or for whom he acts as agent or consultant or in whom he may own any one percent (1%) or more equity interest; and Employee also agrees that if, during such time, he conducts any business on his own account or as a partner or co-venturer, he shall keep the Company informed of that fact and of the nature, names and addresses of such business as conducted from time to time.

 

______      _______

Int.          Int.

  

Exhibit 10.1 Page 13

  

 

Section 3.  Breach.  Employee agrees that a remedy at law for breach of the covenants contained herein would be inadequate, that the Company would suffer irreparable harm as a result of such breach and that in addition to any other rights and remedies of the Company for such breach, the Company shall be entitled to apply to a court of competent jurisdiction for temporary and permanent injunction or an order for specific performance of such covenants, and, if the Company prevails, to recover from Employee all costs of any such action brought by the Company, including without limitation reasonable attorneys’ fees and expenses.

 

Section 4.  Enforcement. It is the desire and intent of Employee that the covenants of Employee contained herein shall be enforced to the fullest extent permissible under the laws and public policies of each jurisdiction in which enforcement is sought.  If any particular provision(s) of this Agreement shall be adjudicated to be invalid or unenforceable, such provision(s) shall be deemed amended to provide restrictions to the fullest extent permissible, consistent with applicable law and policies, and such amendment shall apply only with respect to the particular jurisdiction in which such adjudication is made.  If such deemed amendment is not allowed by the adjudicating body, the offending provision shall be deleted and the remainder of this Agreement shall not be affected.  This Agreement shall be in addition to and not in lieu of any other noncompetition or similar covenants of Employee entered into prior to or after the date hereof (unless otherwise provided in a written agreement signed by the Company).

 

Section 5.  Incorporation from Employment Agreement.  I agree that Sections 15 through 27 of my Employment Agreement with the Company is incorporated herein by this reference.

 

In Witness Whereof, the undersigned have executed this Agreement on effective as of ________________, 2010 ("Start Date").

 

	
[insert name of employee]

	
Bella Petrella’s Holdings, Inc.

 

	
_____________________________

	
By:  ________________________________

	  	
    _________________, President

 

 

 

 

______      _______

Int.          Int.

 

 

 

Exhibit 10.1 Page 14esgi8k20100826ex10-1.htm

PRELIMINARY CORPORATE VENTURE AND INDUSTRIAL TECHNICAL COOPERATION AGREEMENT FOR SPECIFIC TERM

By this instrument, Ensurge, Inc., Salt Lake City Utah USA, with registered office at 2825 East Cottonwood Parkway, Suite 500, Salt Lake City, Utah 84121 801-990-3457, a Utah corporation existing under the laws of the State of Utah, Federal ID number or EIN: 87-0431533, herein represented by its managing-partner, Jordan M. Estra, hereinafter referred to as PARTY 1,

and

MINERAÇÃO NOVA ESPERANÇA, registered with the Taxpayers Registry of the Ministry of Finance under no. CNPJ 109.378.4410001-17, herein represented by the first contractor below, with registered office in the city of Poconé, state of Mato Grosso, at Rodovia MT 060 km 5, herein represented by its director, MOACYR DE CAMPOS, bearer of RG 68.91417SSPISP and registered with the Taxpayers’ Registry of the Ministry of Finance under no. CPF 081.587.032-91, Brazilian, medical doctor, married, the address of whom is Rua Cel.Teófilo, 470, São Francisco, city of Poconé - MT, CEP n. 78.175-000, hereinafter referred to as PARTY 2,

Hereby resolve and agree upon entering this AGREEMENT of corporate venture, industrial and technical cooperation (under mutual risk), for the purpose of providing mutual benefit to both businesses, in the physical location of PARTY 2, as set forth and governed by the following terms and conditions below:

Whereas, it is the intent of both parties to be bound by the general principle of mutual consent; and

Whereas, in good faith and mutual trust, the parties agree to undertake business actions between themselves; and

Whereas, both parties are fully capable of entering and carrying out legal actions, with no hindrance or obstacles thereto (including any declaration or agreement relative to marital relations); and

Whereas, both parties are aware that their relationship is international in scope;

THEREFORE, the Parties agree as follows:

 

  

  

  

SECTION 1. PURPOSE

PARTY 1 and PARTY 2 agree upon this preliminary agreement, as mandatory, for purposes of increasing gold production in the physical location of Party 2, acting as corporate venturers, to work together for the purpose of accomplishing an increase in gold production, (currently exclusive to Party 2), but only with regard to  the Gold Residue Recovery Project described herein, and not as to Party 2’s current and exclusive gold production activity.

1.2 All the real property,  housing, employee facilities, automobile and/or truck fleet, excavation equipment and other assets currently a part of Party 2’s current mineral mining operation, located at the address of PARTY 2, is and shall continue to be property of PARTY 2, and in no manner shall be deemed assigned to PARTY 1.

1.3 The purpose of this preliminary agreement is to identify the parties’ common interests and rights and to define the combined efforts of both parties as co-venturers, related to assets, rights, monies and other matters as agreed, including those contained in contractual amendments, if any.

1.4 The parties agree that they shall not represent or obligate the other party hereto to any third party or other partners (if any), whether acting nationally or internationally, and that they shall be responsible only for their own obligations and actions.

1.5 The management of the operation under this preliminary agreement shall be responsibility of both Parties. However, Party 1 shall not be entitled to impose obligations to other partners or associates of Party 2, and vice versa.

1.6 This agreement also includes as a material condition thereto an obligation of non-competition, and the parties agree upon strict loyalty in the achievement of their common goals, acting at all times within the limits expressly set forth herein in order to accomplish the parties’ common interests.

1.7 At all times hereunder, the parties shall be independent contractors, and each party shall maintain its individual identity and character; accordingly, this agreement shall not be deemed to create a merger or acquisition of the parties.

SECTION 2 TERM

This venture shall remain in force for 180 days, from the date of signature of this agreement, upon which term  the parties shall evaluate the mutual advantages and the possibility to enter a final agreement to permanently govern the relationship.

  

  

  

2.1 Notwithstanding the condition set forth in the prior paragraph, the parties agree that upon termination hereof, all obligations arising out of this agreement shall be calculated and duly settled between the parties, in the event that there should exist any positive or negative balance.

SECTION 3. RIGHTS AND OBLIGATIONS OF PARTY 1

Party 1, upon agreement by Party 2, represents as follows:

3.1 That it is aware and agrees that this agreement shall not, in any event, be deemed as purchase or sale of Party 2’s current activities, facilities or company.

3.2 That all costs associated with geological evaluation, project, engineering, equipment purchase, evaluation reports, technical studies projects, national licenses, and capital venture, as well as all other required documents necessary to carry out this agreement, shall be borne by Party 1, at its sole and exclusive cost and risk, according to its convenience and opportunity.

3.3 That Party 1 shall also be responsible for presenting to Party 2 such reports and legal documents that support the studies, progress and technical efforts to increase the production and extraction of the minerals owned by Party 2.

3.3.1 All informational reports shall be attached to this preliminary agreement and shall be submitted monthly in English and in Portuguese, always in two counterparts.

3.4 Upon signing this document, Party 1 shall promptly undertake the Engineering Scope Study, which shall include detailed geological evaluation of residual reserves at Party 2’s site and the development of a process technology to economically recover gold from the residual matter.

3.5 Each and every entrance and exit by Party 1 into Party 2’s site, for purposes of analysis, study, exploration, or any other purpose, shall be accomplished by the signature of a register with regard thereto, which shall also include information relating to the entrance and exit date and time, personal data of Party 1’s representatives and a statement certifying the removal of any tangible materials, any living creatures or any products.

3.6 Party 1’s rights to exploration and processing shall be limited only to the waste reserves (tailings) at Party 2’s site, and shall not extend to Party 2’s ongoing and continuous gold and mineral exploration and mining activities, which are and shall continue to be Party 2’s sole and exclusive right.

3.7 In accordance with the above, the parties agree that Party 1 shall install machinery, which shall remain its sole property, as well as manpower, technology, and providing the availability of its technical staff to Party 2, to achieve their goals.

  

  

  

3.7.1 The machinery, vehicles and/or truck fleet, technical instruments for the industrial activity or of any other asset placed by Party 1 shall be Party 1's sole and exclusive property. Notwithstanding this provision, it shall be necessary that Party 1 be able to demonstrate its ownership of said property in order to enter Party 2’s site for the purpose of placing said property thereon..

3.7.2 Each and every entrance of goods by Party 1, in accordance with the terms of paragraph 3.7.1 above, shall always be according to the legal proof of ownership of the property, and Party 2 shall be provided with a copy of such document for archival purposes or inspection by competent authorities.

3.7.3 Party 1 shall be solely responsible for maintenance of those items described in paragraphs 3.7.1 and 3.7.2 above.

3.7.4 The parties agree that Party 2 may use all the machinery entering Party 2’s site, and/or instruments, trucks and others to exploit the mineral waste (tailings), which shall be considered as loaned to (but not owned by) Party 2, for purposes of compliance with this agreement, and for the term set forth by the parties.

3.7.5 Issues related to security shall be discussed in a final agreement, under feasible circumstances for both parties.

3.8 Party 1 understands that it is estimated that the Engineering Scoping Study shall cost approximately US$ 250,000 (Two Hundred Fifty Thousand dollars), the sole risk and cost of which shall be borne by Party 1.

3.9 The parties agree that Party 1 shall directly engage and retain all employees and complementary technicians, and that Party 1 shall be legally and extrajudicially responsible for all acts in this regard, with the proviso that it shall afford previous notification to Party 2 about any change in relation thereto.

3.10 Party 1 shall be entitled to the corresponding portion of net profits (upon tax deduction) arising out of the operation regarding gold production resulting from works with waste matter (tailings), at 50% (fifty per cent) for Party 1 and 50% (fifty per cent) for Party 2.

3.10.1 For purposes of this agreement, net profit shall be the total revenue from the sale of gold (resulting from waste [tailings]), upon deduction of the following costs:

a.            Transportation and refining costs;

  

  

  

b.            Manpower, including employee benefits;

c.            Management, including, without limitation: facilities management, accounting;

d.            Power supply;

e.            Consumable materials used in this project;

f.            Maintenance expenses, including spare parts and manpower;

g.            Taxes incurring over the operation; and

h.            Insurance

3.11. Upon conclusion of the Engineering Scoping Study (which shall be made available to the parties within 90 days from the signature of this agreement), and assuming that the Engineering Scoping Study shows that the project is economically and technically feasible, at Party 1’s sole costs and risks, within the same term above, Party 1 shall:

a         Commission the required processing equipment;

b.        Arrange for the delivery of such equipment at the mine in Poconé, MT, Brazil; and

c.        Supervise its installation and operation;

3.12 Within 45 days from the beginning of production at the Gold Residual Recovery Project, Party 1, at its sole discretion, shall be entitled to metallurgically evaluate the existing mineral milling and gold recovery operations, in order to develop an enhanced processing technology for purposes of increasing gold production relative to the current mining operations.

3.12.1 The evaluation in 3.12 shall be fully borne by Party 1, which shall provide the results in a written Metallurgic Evaluation report submitted to Party 2.

3.12.2 For purposes of section 3.12, production shall be deemed as beginning  upon production of the first gold bar.

3.12.3 Should the metallurgic evaluation demonstrate the economic and technologic feasibility of an improvement and increase of production relative to the current primary gold mining activities (referred to as “Primary Recovery Enhancement Project), within thirty days, Party 1, at its sole cost and risk, may undertake the measures set forth in item 3.11, "a", "b", "c" and "d".

3.13 After the Gold Residual Recovery Project and the Primary Recovery Enhancement Project have commenced, Party 1, also at its sole cost, shall carry out a geological evaluation of the Property for possible mineral leasing, of the entire site owned by Party 2, for purposes of developing a mineral reserve calculation consistent with international mining standards, with the intent to improve methods to:

  

  

  

a.         Improve control relative to the range of productive minerals in the mine;

b.        Reduce mining of non-productive earth which either contain no gold or are of very limited value, to be recovered in economic way;

c.        Increase productive mining weight; and

d.        Reduce the gold production cost per ounce

3.14 Party 1 shall also be fully responsible for the payment of all amounts set forth in section 5.

3.15 Party 1 shall be responsible to third parties for damages arising out of product failure as a result of inadequate or omitted technical information.

3.16 Party 1 is aware that, in addition to that weekly paid rest period provided by the law relative to professional or other labor activities, there shall also exist an obligation that no activity, study, visit, and/or evaluation, [or] excavation shall occur from 04:00 pm on Friday until 07:00 pm on Saturday.

3.17 In the event that performance of this preliminary agreement requires that changes be employed with regard to geography, safety, organization, or other changes, such shall be the sole monetary responsibility of Party 1.

 

3.18 Calculation of the amount of gold produced, within the limits of this agreement, as well as its payment shall be done by independent auditors, to be retained at Party 1’s costs and responsibility, at all times upon approval by Party 2.

3.18.1 The amount found shall be divided equally between the parties hereto. The distribution of amounts due to each party shall be done within five (5) working days of the end of each month of operation.

SECTION 4. RIGHTS AND OBLIGATIONS OF PARTY 2

4.1 Party 2 shall facilitate, and shall not impede in any manner Party 1’s technical and transitory activities at its site, through the provision of information and documents, when requested.

4.2 As a result of this joint operation and temporary association, Party 2 shall be entitled to the corresponding portion of net profits (after deduction of taxes) arising out of the operation regarding gold production resulting from the project relative to the waste matter [tailings], at 50% (fifty per cent) for Party 1 and 50% (fifty per cent) for Party 2.

  

  

  

 

4.2.1 For purposes of this agreement, net profit shall be the total revenue from the sale of gold (resulting from waste [tailings]), upon deduction of the following costs:

	
  

	
a.

	
Transportation and refining costs;

	
  

	
b.

	
Manpower, including employee benefits;

	
  

	
c.

	
Management, including, without limitation: facilities management, accounting; power supply

	
  

	
e.

	
Consumable materials used in this project;

	
  

	
f.

	
Maintenance expenses, including spare parts and manpower;

	
  

	
g.

	
Local taxes not related to the revenue, if any, and taxes paid by the party related to employee’s wages;

	
  

	
h.

	
Insurance

4.3 Party 2 agrees that it shall not enter any agreement with any party, other than Party 1, to evaluate the Residual Recovery Project, the Primary Recovery Enhancement Project or the overall geological evaluation of its properties, nor shall Party 2 sell its equity while the parties hereto are evaluating the potential to proceed with the subsequent steps set forth in this Agreement.

4.4 This Agreement shall not limit the exclusive right of Party 2 and/or third parties assigned by it, to use, enjoy and produce from the site and everything therein, including existing minerals.

4.5 The Parties agree that any gold produced from the tailings shall be weighed on site, upon extraction, and duly accounted for.

4.6 Notwithstanding this corporate venture between the parties, the parties agree that administration and management of the business shall be responsibility of Party 2, at its costs and risks, and under its jurisdiction.

4.7 It is also understood that Party 2 declares that it acts as a borrower of all equipment, machinery and/or instrument entered into its site, under the appropriate property ownership documents, and that maintenance of such equipment is not Party 2's responsibility.

4.8 For all fiscal, social security, criminal, civil and/or environmental purposes, under Brazilian laws, Party 2 shall not be responsible for any illegal and/or irregular act perpetrated by Party 1.

4.9 Party 2 shall be entitled, at its costs, to retain assistants, technicians, evaluators and/or supervisors to extrajudicially and technically accompany activities engaged in by Party 1, in order to protect Party 2’s interests, including reports, inspections, visits or other activities.

     

      

SECTION 5. COMPENSATION

  

  

  

5.1 With regard to compensation due and in connection with this venture, for all purposes, the currency for payment shall be shall be the Brazilian real. Therefore, all amounts shall be converted into Brazilian reals (R$).

5.1.1 The exchange rate shall be that in force on the date of transfer of amounts under this agreement. As consideration for the exclusivity provided to Party 1 under this preliminary agreement, and the opportunity to carry out the studies set forth herein, Party 1 shall pay to Party 2 the following amounts:

5.2 Party 1 shall pay to Party 2, in cash, the amount of US$ 50,000 (Fifty Thousand Dollars) within seven (7) working days from the signing of this agreement, to be deposited into account 104586-3, Branch 7619, at Unibanco, Bank no. 409, in the name of Moacyr de Campos, CPF n. 081.587.032.91, phone (65) 9982-4588, Swift UBBRBRSP, or any account that Moacyr de Campos indicates; and the deposit slip issued by the bank shall be evidence of payment for all due purposes.

5.2.1 Party 1 shall send by email a copy of the deposit slip to the following email addresses: raquelfonsuol.com.br, escritorio.ivelise@aasp.orq.br, ivelise.fonseca@uol.com.br .

5.2.2 In the event of a conflict of bank information, Party 1 shall be responsible for requesting necessary information, with no prejudice to the responsibility to pay the amount set forth above.

5.3 Party 1 shall pay to Party 2, in cash, the amount of US$ 50,000 (Fifty Thousand Dollars) upon conclusion of the Engineering Scoping Study, described above in item 3.4 in this Agreement, should Party 1 determine that it will proceed to move forward with the deployment and operation of the Gold Residual Recovery Project.

5.4 In the event that the Engineering Scoping Study, carried out by Party 1, indicates that there are 100,000 ounces of gold (3,110,348 grams of gold), an additional bonus in the amount of US$ 1,000,000 (one million dollars) shall be paid by Party 1 to Party 2 upon the beginning of production of the Gold Residual Recovery Project.

5.4.1 The beginning of production of the Gold Residual Recovery Project shall be deemed upon production of the first gold bar. Additional payments of US$ 1,000,000 (one million dollars) shall be made by the end of month 12, month 24 and month 36, from the beginning of the Gold Residual Recovery Project. These additional payments shall only be made if the Gold Residual Recovery Project is still operating when payments are due.

5.5 In the event that the Engineering Scoping Study indicates that there exist less than 100,000 ounces of gold (3,110,348 grams of gold), payments set forth in item 5.4 shall not be made.

  

  

  

5.6 Party 2 shall also receive [from Party 1] US$ 250,000 (Two Hundred Fifty Thousand Dollars) in cash, at every annual anniversary of the beginning of the Gold Residual Recovery Project; that is, at the end of months 12, 24, 36, 48, 60, and successively, upon the beginning of the Gold Residual Recovery Project (as described above), while the project is operational.

5.7 Party 2 shall be entitled to the payment by Party 1 of US$ 100,000 (one hundred thousand dollars) upon conclusion of the Evaluation referenced in paragraph 3.12 hereunder, in the event that Party 1 chooses to proceed with the Mine Recovery Enhancement Project.

5.8 Party 2 shall also be entitled to US$ 100,000 (one hundred thousand dollars) at the beginning of the Mine Recovery Enhancement Project as set forth in paragraph 3.12. The beginning shall be deemed upon production of the first gold bar under the project.

5.9 Party 2 shall also receive US$ 250,000 (two hundred fifty thousand dollars) from Party 1, at every annual anniversary of the beginning of the [Mine Recovery Enhancement] Project, as set forth in 3.12, that is, by the end of months US$ 250.000, 3.12, 12, 24, 36, and successively, upon the beginning of the Project, while the project is operational.

5.10 Except for compensation due under paragraph 5.2, all other amounts shall be deposited to the account assigned by Party 2.

     

     

SECTION 6. MISCELLANEOUS

       

         

6.1 The parties agree that all documents exchanged between them, whether hardcopy or electronic, in order to be valid and effective, shall be translated into Portuguese.

6.2 All projects, analysis results, reports, shall be provided to Party 2, under penalty of breach of contract, under the terms in paragraph 6.1.

6.3 Both parties acknowledge the existence of this international agreement, but Party 1 represents for all due purposes that it waives its rights to the jurisdiction of any other location, being subject, for all due purposes to the Brazilian Law, Brazilian Civil Code and other rules, bureaus or administrative acts.

6.4 All compensation due to Party 2 shall be paid in the account assigned by Party 2, whether by email and/or amendment to this preliminary agreement, under penalty of breach of contract, without prejudice to any other rights hereunder.

6.5 By this paragraph, it is reiterated herein that this agreement is preliminary, bilateral, temporary, and shall not be deemed as transfer of property, creation of a new company, the dissolution of any company, or assignment of any right.

  

  

  

6.6 [Omitted]

6.7 The parties agree that during the term of this agreement, Party 1 shall have preemptive rights to acquire Mineração Nova Esperança, Party 2’s site.

6.8 This preliminary agreement recognizes that, periodically, Party 2 may receive other purchase proposals for its company.

6.8.1 Upon signing this agreement, any offer received in good faith by Party 2 from a third party other than Party 1 shall be submitted to Party 1 within 10 (ten) days from the receipt thereof.

6.8.2 Upon receiving the offer, Party 1 may exercise its preemptive right. This preemptive right shall be extended for twenty (20) days from the time the written proposal is submitted to Party 1;. Oral communication of those offers shall not be deemed as adequate notice under this agreement.

6.8.3 Should Party 1 fail to exercise its preemptive right within forty five (45) days, upon notice by Party 2 of the offer in good faith, Party 2 may continue negotiations relative to the proposal presented by third party.

6.8.3.1 Notwithstanding the preemptive right of Party 1, Party 2 shall not be obliged to accept its [Party 1’s] proposal if Party 2 determines that it is not financially satisfactory.

6.9 Both Parties shall notify any potential acquiring third party about the terms in this preliminary agreement and shall inform any party interested in acquiring Party 2 that such acquiring third party shall be required to accept the position of Party 2 under this agreement, in the event that the sale falls within the term of this agreement.

6.10 If the Engineering Scoping Study or Evaluation indicate that there is no economic or technologic feasibility to (1) recover gold from residual [tailings] or 2) primary extraction, Party 1 shall have the right to not proceed with additional developments or further evaluations.

6.10.1 In such a case, Party 1 shall provide to Party 2 all reports and documents related to the Engineering Scoping Study or Evaluation, and this agreement shall be terminated.

SECTION 7. PENALTY CLAUSE (LIQUIDATED DAMAGES)

 

  

  

  

 

7.1 Should Party 2 engage in discussions or evaluations or establish any legal operation related to this agreement or partnership with a third party, or sell its equity in its mining operations to a third party, Party 1 shall be entitled to damages in the amount invested by Party 1.

 

7.2 Should either party fail to comply with its obligations hereunder, or fail to respect the rights set forth herein, it shall be subject to liquidated damages in the amount of US$ 70,000 (seventy thousand dollars), without prejudice to other penalties.

SECTION 8. FINE

Failure to pay amounts due hereunder in a timely manner, regarding Compensation, shall cause incurrence of interest at 1% (one per cent) per month, calculated from the payment due date until effective payment, and monetary adjustment according to IGP-M by FGV.

 

8.1 In case of delay to pay amounts in item 5.1, the amount in section 7.2 shall also apply for contractual non-compliance.

SECTION 9. GUARANTEE

The parties also agree that, to guarantee this preliminary agreement, collaterals shall be presented upon signature of the final agreement.

SECTION 10. FINAL TERMS

10.1 Within 40 days after the signing hereof, Party 1 shall identify its representative, with office in Brazil, for purposes of service of legal process, which designation shall constitute part of this preliminary agreement.

10.2 The parties agree that upon termination of this agreement, the parties shall be entitled to enter into a final agreement, to be prepared and mutually agreed upon.

10.3 For any activity under this agreement, whether sale, technology, exploitation, partnership and other legal acts, the applicable law shall be that of the country of Brazil.

  

  

  

 

10.4 The parties agree that any claims arising from this agreement shall be determined by the Brazil-Canada Arbitration Chamber, located in São Paulo, that each party shall bear its own expenses in relation thereto, and that the non-prevailing party shall pay all costs relative thereto.

        

10.5 In the event of a claim arising under paragraph 10.4 hereunder, the parties agree that Party 1 shall present within ten (10) working days the name of its legal representative, duly set forth in a power of attorney, with special powers, including to be summoned by legal process. There shall be a power of attorney duly signed.

10.5.1 The assignment of arbitrators shall be appointed by the Chamber.

10.5.2 Upon signing this agreement, the parties also agree upon the arbitration clause to solve conflicts.

10.6 All technical information, including, without limitation, study reports, evaluation reports, and others, as well as all acts perpetrated during the term of this agreement, documents and data, are confidential and may not be disclosed to third parties, under any circumstances, including the termination of this agreement.

SECTION 11 TERMINATION

11- This agreement may be terminated by either party, with no penalty and/or indemnity under the following circumstances:

a)            Regulatory and/or legal issues that prevent performance of the agreement;

b)            In case of exhaustion of gold reserves;

c)            Should the business object of this agreement not be profitable;

d)            In case of information that prejudices either party, including images, commercial representations, or others.

e)            Mutual agreement between the parties.

12- A claim arises under Section 7 hereof, as follows:

a) when notice is sent by the innocent party to the defaulting party, and it does not cure the breach within three (3) days from the notice date;

b) in case of breach of contractual confidentiality or other contractual non-compliance.

In witness whereof, the parties sign this preliminary agreement before witnesses below, in two counterparts of equal validity.

  

  

  

 

The parties choose the court of the capital of São Paulo to solve any conflict when the Arbitration Chamber is not sufficiently competent.

Accepted, signed and delivered:

São Paulo, August 26th, 2010

	
______________________

	
_____________________

	
Moacyr de Campos

	
Jordan M. Estra

	
On behalf of Mineração

	
President and Executive Director

	
Nova Esperança and Família Campos

	
Ensurge, Inc.

Witness 1 ____________________________

Witness 2 ____________________________

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