This Royalty Agreement involves
Title: SETTLEMENT AGREEMENT AND ROYALTY AND SHARE BUY BACK
Industry: Communications Equipment Sector: Technology
SETTLEMENT AGREEMENT AND ROYALTY
AND SHARE BUY BACK
This Agreement is entered into and effective as of February 1, 2013 by and between SECUREALERT, INC., a Utah corporation (“SA”) with its principal executive office located at 150 West Civic Center Drive, Suite 100, Sandy, Utah 84070, BORINQUEN CONTAINER CORPORATION (“BQN”) a Puerto Rican corporation, with a principal mailing address of P.O. Box 36477 San Juan, Puerto Rico 00936-4744, and Sapinda Asia Limited, a British Virgin Islands corporation (“Sapinda”). SA, BQN and Sapinda are also referred to individually as a “party” and collectively as the “parties.”
WHEREAS, SA and BQN entered into that certain Royalty Agreement dated July 1, 2011, subsequently amended effective as of July 1, 2011 (the “Royalty Agreement”) granting BQN the right to receive royalties based on income derived by SA in the Territory (as defined in the Royalty Agreement). The parties agree that SA owes BQN certain amounts for royalties earned by BQN under the Royalty Agreement and for other concepts; and
WHEREAS, the parties later entered into certain agreements for the sale of BQN’s rights under the Royalty Agreement and for the sale of BQN’s shares of stock in SA (herein referred to as the “Buy Back Agreements”) and Sapinda and SA defaulted under those agreements. In connection with those agreements SA and Sapinda entered into a $16,640,000 loan agreement and
WHEREAS, BQN terminated the Buy Back Agreements, and
WHEREAS, SA desires to purchase BQN’s rights under the Royalty Agreement and pay BQN all amounts owed to BQN under that agreement and Sapinda has agreed to contribute funds to SA to enable SA to purchase such royalty rights; and
WHEREAS, Sapinda desires to purchase all of BQN’s shares of stock in SA, and
WHEREAS, the parties and Tetra House Pte. Ltd., a Singapore corporation, (“TH”) desire to release each other from any claims that they may have against each other under the Royalty Agreement and the Buy Back Agreements and any extensions or amendments thereof,
NOW, THEREFORE, in consideration of the mutual promises, covenants, representations and good and valuable consideration between the parties, the adequacy of which is hereby acknowledged, the parties hereby agree as follows:
1. Initial Payment: Simultaneously with the execution of this agreement SA will make a payment to BQN of Thirteen Million Dollars ($13,000,000.00) by wire transfer of immediately available funds from a bank in the United States.
2. Second Payment: Not later than February 28, 2013, Sapinda will pay BQN Five Million Dollars ($5,000,000.00) consisting of Three Million Dollars ($3,000,000.00) by wire transfer of immediately available funds from a bank in the United States and Two Million Dollars ($2,000,000.00) that BQN has previously received from Sapinda. In the event of a failure by Sapinda to make this second payment BQN shall return One Million Dollars ($1,000,000.00) to Sapinda and shall be entitled to keep all of its shares in SA and all monies previously received from Sapinda as liquidated damages.
3. Settlement of Claims and Transfer of Shares and Royalty Rights: BQN’s royalty rights will be transferred to SA immediately upon receipt of the Initial Payment by BQN at its bank in Puerto Rico and the parties and TH will release each other fully from any and all