EXHIBIT 10.2
July 23, 2001
Xxxxxx X. Xxxxxxxx
Interim Chief Executive Officer
Freestar Technologies
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Re: Letter of Intent to Acquire ePaylatina, a Dominican Republic
Corporation transfer of assets with and into Freestar Technologies, a
Nevada corporation
This Binding Letter of Intent made by and between ePaylatina, SA a
corporation organized under the laws of the Dominican Republic ("epaylatina")
and Freestar Technologies ("Freestar"), a Nevada corporation, with respect to
the sale and transfer of ePaylatina's assets into Freestar. This Agreement is
meant to be binding upon the parties hereto with respect to the following terms
and conditions:
(1) ePaylatina will make a bulk transfer of all it= existing and
to be developed assets into Freestar, in exchange for
1,000,000 shares of Convertible Preferred stock in Freestar,
said shares to be issued pursuant to Section 4(2) of the
Securities Act of 1934, as amended [the Act], to be disbursed
to the present shareholders of ePaylatina in proportion to
their respective interests in said corporation. These
Preferred shares shall convert into 12,000,000 shares of
Common stock, one third of the number of shares convertible
over a period of three years commencing 12 months after the
consummation of the transaction providing the owners meet
earning criteria of not less than one million dollars per year
after insurance, depreciation and interest but before taxes.
The Preferred stock shall be voting and each share shall
receive 12 votes on any issue brought before the shareholders.
Additionally, a total of 12,000,000 shares shall be issued to
various consultants who have arranged this transaction and
will have worked on the transaction to see it through to
completion. 4,000,000 of these shares shall be registered on a
Form S-8 and the balance of these shares likewise, shall be
issued under Section 4(2) of the Act. 2,000,000 of the above
referenced S-8 shares shall be locked up and released to the
owners based upon meeting earning criteria of not less than
one million dollars per year after insurance, depreciation and
interest, but before taxes.
(2) As a condition precedent to the transfer, ePaylatina shall
provide the following to Freestar within 30 days of the date
of the execution of this Agreement:
2.1 A business plan including pro forma projections for
at least 5 years;
2.2 An appraisal of the assets of the business of
ePaylatina by a competent business appraiser;
2.3 A certified audit of the assets and liabilities of
ePaylatina for the last two fiscal years
demonstrating that ePaylatina has at least $1,100,000
U.S. in assets;
2.4 Copies of all credit lines with any banks or other
entities with whom ePaylatina has entered into equity
financing;
2.5 An appraisal of the value of any and all patents
owned or held by ePaylatina or its executive officers
which is an asset of ePaylatina or is a required part
of the technology which ePaylatina has developed;
(3) All of the parties agree that none of them will recommend to
the shareholders or allow the Board of Directors to recommend,
advocate or allow a forward or reverse split of the Common
stock in Freestar for a period of at least five (5) years
following the consummation of this transaction nor shall the
Board further dilute the stock by issuing stock to themselves
or their immediate family, agents or representatives.
(4) This Binding Letter of Intent shall remain open until such
time as ePaylatina has furnished the required information as
set forth in Paragraph 2 hereof which is for a period of 30
day from the date of the execution hereof, providing however,
that the time may be extended by the agreement of all of the
parties hereto.
(5) Xxxx Xxxx ("Xxxx") will become the Chief Executive Officer of
Freestar and will be solely responsible for distributing the
stock in Freestar to the existing shareholders of ePaylatina
in accordance which such shareholders respective interests.
Xxxx, Xxxxxx X. Xxxxxxxx and one nominee of Xxxx will at all
times hereafter maintain a position on Freestar's Board of
Directors. Unanimous vote of the Board of Directors shall be
required to authorize a substantial change in control,
issuance of additional shares, reorganization, or a sale of
significant assets of Freestar. .
(6) The current assets of ePaylatina consist of various
intellectual properties (including, but not limited to,
registrations, website domains, software licenses, or rights
related thereto), technology, confidential business and
technical information, research and development, technical
know how, trade secrets, strategic alliances and other
operational relationships, existing and to be developed
banking relationships and existing exclusive marketing
contracts, management consoles, computer software and
hardware, billing information and all intangible assets
including goodwill and information of competitive advantage.
(7) Freestar shall use its best efforts to arrange for an infusion
of capital into the business in an amount of not less than
$1,000,000 to facilitate the building of the business and to
support various costs of the business until such time as a
cash flow begins to develop and shall undertake to register,
if deemed necessary, 20 million pursuant to an SB-2
Regisration Statement with the SEC.
(8) Freestar represents and warrants that the corporation
currently has 6,861,500 shares of common stock issued and
outstanding and has 80,000,000 shares of common stock
currently authorized. Additionally, Xxxx agrees to allow
Xxxxxxxx to spin off ePaylatina for consideration to be
determined in the Board of Director=s discretion at any time
after two (2) years subsequent to the execution of this
Agreement and will give existing shareholders of Freestar at
said date twenty percent (20%) of the issued and outstanding
shares in the form of a stock dividend distribution.
(9) It is agreed and understood that irrespective of control of
the Board of Directors, the parties will cause an employment
agreement to be entered into with Xxxx with compensation as
follows: $150,000 for the first year, $250,000 for the second
and third year and based upon a performance standard to be
agreed upon by the Board of Directors for a period of three
(3) years, exclusive of director and officer benefits offered
to current executive employees, officer and directors of
Freestar plus stock options to be determined by the Board of
Directors who will provide a stock option plan for employees.
(10) It is agreed and understood that the shareholders of Freestar
will use their best efforts to place the products offered by
ePaylatina with appropriate businesses and Xxxx will receive,
as additional compensation, a finder=s fee equal to five (5)
per cent of the gross revenues generated by companies Xxxx
develops strategic alliances as such revenues are collected by
Freestar.
(11) Prior to the transfer and acquisition of the assets of
ePaylatina, except as required by law or the rules of any
stock exchange, no public announcement or other publicity
regarding the transactions referred to herein shall be made by
Freestar or ePaylatina or any of their respective affiliates,
officers, directors, employees, representative or agent,
without prior written consent of Xxxx Xxxx and Xxxxxx X.
Xxxxxxxx, in any case, as to form, content, timing and manner
of distribution or publication; provided however that nothing
in this section shall prevent such parties from discussing
such transaction with such persons whose approval agreement or
opinion, as the case may be, required for consummation of such
particular transaction or transactions.
(12) Each of the parties hereto agrees to cooperate in good faith
with the other, and to execute and deliver such other and
further documents, instruments and agreements and perform such
other acts as may reasonably be necessary or appropriate to
consummate and carry into effect the transactions contemplated
by this Agreement.
(13) Unless otherwise specified, the remedies provided in this
Agreement shall be cumulative and shall not preclude the
assertion or exercise of any other rights or remedies
available by law, in equity or otherwise.
(14) This Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of Nevada
without giving effect to the principles of conflicts of law
thereto. All parties hereby submit themselves to the personal
jurisdiction of the State and Federal courts located in the
State of Nevada and further agree that the proper venue for
any action arising from, related to, or in connection with
this Agreement shall be in the State of Nevada.
(15) This Agreement constitutes legal, valid and binding
obligations of each party and each will constitute the legal,
valid and binding obligations of each such party, enforceable
except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors=
rights generally and by equitable limitations on the
availability of specific remedies.
(16) This Agreement sets forth the entire agreement and
understanding of the parties hereto and supersedes any and all
prior agreements, understandings and arrangements among the
parties.
(17) In the event that any of the terms, conditions, or covenants
contained in this Agreement shall be held to be invalid, any
such invalidity shall not affect any other terms, conditions
or covenants contained herein, all of which shall remain in
full force and effect. If any of the terms or conditions of
this Agreement are determined by a court of competent
jurisdiction to be invalid or unenforceable as a result of the
scope or breadth of such terms or conditions, where possible,
such terms and conditions shall be deemed to be limited to
such scope and breadth so as to be deemed enforceable.
(18) All terms and conditions concerning th acquisition shall be
stated in a definitive agreement that will be subject to the
approval of the parties, acting upon the advice of independent
counsel. Those terms and conditions will include
representations, warranties, covenants and indemnities that
are usual and customary in a transaction of this nature and
are mutually acceptable to the party's signatory hereto.
(19) If any legal action or other proceeding is brought for the
enforcement of this Agreement or because of an alleged
dispute, breach, default, or misrepresentation in connection
with any of the provisions of this Agreement, the successful
or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which
it mat be entitled.
(20) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered with full and complete authority to act on behalf of the
respective entities a party hereto as of the date first above written.
FREESTAR TECHNOLOGIES, a Nevada corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Interim Chief Executive Officer
EPaylatina, SA, a Dominican Republic corporation
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, President & CEO
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, individually
