Freedom Resources Enterprises, Inc. Houston, Texas 77027
Exhibit
3
Freedom
Resources Enterprises, Inc.
0000
Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
June 10, 2010
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Latin-American
Fuels Corporation
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Xxxxxxx
0 Xx. 00-00 Xx. 000, Xxxxxx,
Xxxxxxxx
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Attn:
Xxxxxxxx Xxxxx Xxxxxx,
President
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Dear Xx.
Xxxxxx:
This
letter agreement (the “Agreement”) is by and among Freedom Resources
Enterprises, Inc., a Nevada corporation (the “Company”), Latin-American Fuels
Corporation (“Latin-American”), and Xxxxxxxx Xxxxxx Xxxxx (“Xxxxxx”).
Capitalized terms used in this Agreement are defined on Annex 1
hereto.
Reference is made to that certain Stock
Purchase Agreement, dated the date hereof, by and among Life Power & Fuels
LLC, a Delaware limited liability company (“LIFE”), Xxxxxx Xxxxxxx, Xxxxx
Xxxxxxxx, the Xxxxxx and Xxxxxxx Xxxxxx Revocable Living Trust, and
Latin-American, pursuant to which Latin-American purchased 9,000,000 shares (the
“Shares”) of common stock, par value $0.001 per share, of the Company from LIFE
for aggregate consideration of $17,751.48.
This Agreement will confirm our
understanding and agreement that the Shares shall be subject to the restrictions
set forth here (in addition restrictions pursuant to applicable securities laws)
.. We agree as follows:
1. Restricted Shares and Vesting.
As of the date of this Agreement, all of the Shares shall be subject to a risk
of forfeiture or repurchase by the Company based upon (i) Xxxxxx’ continued
employment with the Company in accordance with this Section (the Shares, while
and to the extent so subject to the risk of forfeiture or repurchase, being
hereafter referred to as “Restricted Shares”). Restricted Shares
shall vest and no longer be subject to forfeiture or repurchase as
follows:
(a) Time Based Vesting.
The Restricted Shares shall vest as follows: (i) 3,000,000 Restricted Shares
shall immediately vest on June 10, 2010, (ii) an additional 3,000,000 Restricted
Shares shall vest on June 10, 2011, and (iii) the final 3,000,000 Restricted
Shares shall vest on June 10, 2012. The Company may, in its sole
discretion accelerate the vesting of any and all Restricted Shares upon a
Termination solely due to the death of Xxxxxx prior to June 10, 2012. The
foregoing Share amounts shall be subject to adjustment upon the occurrence of
any stock split, stock combination or the like.
(b) Termination for Cause or
without Good Reason. In the event of a Termination by the
Company for Cause or by Xxxxxx without Good Reason, Latin-American shall forfeit
all of the Restricted Shares to the Company for no consideration, and shall have
no rights or claims with respect to any of the Restricted Shares.
(c) Termination without Cause or
with Good Reason. In the event of a Termination by the
Company without Cause or by Xxxxxx for Good Reason, the Company (or its
designee(s)) shall have the right but not the obligation to repurchase (the
“Repurchase Right”) all or any portion of the Restricted Shares (the “Repurchase
Shares”) from Latin-American for an amount equal to the Fair Market Value of the
Repurchase Shares as of the date of the Termination. If the Termination is due
solely to the death of Xxxxxx prior to June 10, 2012, the Company may, in its
sole discretion, elect to accelerate the vesting of any and all Restricted
Shares in lieu of exercising its Repurchase Right to such Restricted Shares. The
Repurchase Right shall be exercisable at any time during the period (the
“Repurchase Period”) commencing on the date of Termination and ending on the
30th day following the date of Termination. For avoidance of doubt,
the Repurchase Right shall not apply to any vested Shares, which shall be
retained by Latin-American. The Repurchase Right shall be exercisable
by the Company (or its designee(s)) by written notice delivered to
Latin-American prior to the expiration of the Repurchase Period. The
notice shall indicate the number of Repurchase Shares to be purchased and the
date (not later than 10 days after the expiration of the Repurchase Period) on
which the purchase is to be effected. The closing of an exercise of
the Repurchase Right shall take place at the principal office of the Company on
the date specified in the written notice delivered by the Company (or its
designee(s)). At the closing, payment of the price with respect to
the Repurchase Shares shall be made by the Company (or its designee) in cash,
bank check or wire transfer of immediately available funds to an account
designated in advance by Latin-American and the Repurchase Shares shall be
transferred on the books and records of the Company.
2. General Restriction on
Transfer. Restricted Shares shall not be transferable, and neither the
Restricted Shares nor any interest therein may be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than to the Company or
its assignees or designees. Any sale, transfer, assignment, pledge, encumbrance
or other disposition of Restricted Shares other than in accordance with this
Section shall be void. The Company shall not be required (i) to
transfer on its books any Restricted Shares sold, transferred or otherwise
disposed of in violation of this Section or (ii) to treat as owner of any
Restricted Shares, or to pay dividends in respect of Restricted Shares to, any
person purporting to have acquired Restricted Shares or any beneficial interest
therein. Latin American acknowledges that stock certificates
representing the Restricted Shares shall bear appropriate legends reflecting the
restrictions set forth in this Agreement.
3. Miscellaneous. This
Agreement shall be construed and enforced in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof and
shall be binding upon and inure to the benefit of any successor or assign of the
Company. This Agreement may be executed in one or more counterparts
all of which together shall constitute but one instrument.
[Remainder
of page intentionally left blank]
If this letter accurately reflects your
understanding and agreement as to the matters set forth above, please sign and
return to the undersigned the enclosed copy of this letter.
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Very
truly yours,
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Freedom
Resources Enterprises, Inc.
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By:
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/s/
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Xxxxxx
Xxxxxx
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Name:
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Xxxxxx
Xxxxxx
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Title:
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Managing
Member
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ACCEPTED
and AGREED this
10th day
of June, 2010
Latin-American
Fuels Corporation
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By:
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/s/
Xxxxxxxx X. Xxxxx
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Xxxxxxxx
X. Xxxxx, President
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/s/
Xxxxxxxx X. Xxxxx
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Xxxxxxxx
X. Xxxxx, individually
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ANNEX
I
DEFINED
TERMS
The
following definitions shall be in effect under the Agreement:
“Cause”
shall mean (i) a material breach by Xxxxxx or Latin-American of the terms
and conditions of this Agreement, which, if such violation or breach
is curable, shall not have been cured within twenty (20) business days after
receipt of written notice from the Company specifying such breach;
(ii) commission by Xxxxxx of an act of fraud, embezzlement,
misappropriation, theft or material dishonesty or material breach of fiduciary
duty; (iii) Latin-American’s conviction on an entry of any pleas other than
“Not Guilty” to any felony involving theft or fraud.
"Fair
Market Value” means, as of any date of determination, the fair market value of
the Shares as determined by independent appraisal by an appraiser mutually
selected by the parties.
“Good
Reason” shall mean a material breach by the Company of this Agreement, , which,
if curable, shall not have been cured within twenty (20) business days after
receipt of written notice from Latin-American specifying such
breach.
“Restricted
Shares” shall have the meaning set forth in the Agreement.
“Shares”
shall have the meaning set forth in the Agreement.
"Termination"
means a termination of the Xxxxxx’ employment relationship with the Company by
the Company or Xxxxxx, for any reason, whether with or without Cause or Good
Reason.
