Employment Offer Letter between Blackwater Midstream Corp. and Michael D. Suder, dated May 7, 2008

Summary

Blackwater Midstream Corp. offers Michael D. Suder the position of Chief Executive Officer, starting May 7, 2008, with a salary of $300,000 per year and equity incentives. The employment term is at least five years, with specific conditions for termination and severance. Suder is entitled to benefits, vacation, and reimbursement of business expenses. The agreement outlines circumstances for termination with or without cause and for resignation with good reason, including severance and stock vesting provisions. A formal employment agreement is to be executed by May 31, 2008.

EX-1.01 2 blackwater_8k-ex0101.txt SUDER EMPLOYMENT OFFER LETTER, DATED MAY 7, 2008 EXHIBIT 1.01 Blackwater Midstream Corp. May 7, 2008 Mr. Michael D. Suder 1750 St. Charles Avenue, Apartment 511 New Orleans, LA 70130 Re: OFFER OF EMPLOYMENT Dear Michael: It is with great pleasure that I extend the following offer of employment with Blackwater Midstream Corp. (the "Company"). The terms of the employment are as follows: Commencement Date: Start date of May 7, 2008, but with salary commencing as of May 1, 2008. Position: Chief Executive Officer. You will report directly to the Board of Directors and will receive your directives from the Board of Directors. Term: The Term of employment shall be not less than five (5) years, subject to earlier termination as provided below. Salary: $300,000 per year (subject to required withholding), payable in arrears in equal semi- monthly installments on the 15th and last day of each calendar month. Equity: On the Commencement Date you shall be entitled to purchase shares of Company Common Stock which shall represent approximately two percent (2.0%) of the outstanding shares of capital stock of the Company on a fully diluted basis, for an initial purchase price equal to the par value (or if there is no par value, $0.01 per share), which price the Board of Directors deems to be the fair market value on the date of purchase. The shares shall vest at the end of six months of employment, so long as you are still employed by the Company. In addition, the Company shall grant to you an option to purchase an additional five and one-half percent (5.5%), which options shall vest over the term of the employment, based upon performance objectives to be reasonably determined by the Board of Directors. The options shall have an exercise price of $1.50 per share, shall contain cashless exercise provisions and shall be subject to the terms of the stock incentive plan to be adopted by the Company. Mr. Michael D. Suder May 7, 2008 Page 2 of 3 Vacation: All federal and state holidays, plus three (3) weeks of paid vacation. Benefits: You shall be entitled to participate in all medical, dental, life and other insurance plans adopted by the Company for any executive officer. Reimbursement of Expenses: The Company will reimburse you for all business related expenses, including travel (other than commuting to the office from your residence), cell phone usage, etc., provided you comply with the reimbursement policies and procedures adopted by the Company and provide appropriate proof of payment. Written Agreement: The Company shall prepare a written employment agreement to be executed on or before May 31, 2008 evidencing the terms of this employment offer. Termination: You may be terminated only with "Cause" which will be defined to by (i) conviction of any fraud or embezzlement against the Company or (ii) willful breach or habitual neglect of your duties and responsibilities after written notice and an opportunity to cure. If you are terminated without Cause, then you will be entitled to (i) a one-time lump sum severance payment equal to the salary for the remaining term of the employment agreement but not more than six months and (ii) all stock that would have been earned during such six month period shall immediately vest. If you resign for "Good Reason", you will be entitled to the same severance payments as termination without Cause. The grounds for your resignation for "Good Reason" will be (i) the Company moves its offices more than 30 miles away from Newport Beach, California, (ii) a material reduction in your job title, duties, description or compensation, (iii) any criminal or civil charges filed against the Company alleging fraud specifically by you. Mr. Michael D. Suder May 7, 2008 Page 3 of 3 Michael, we are excited about the opportunity to work with you and look forward to a long and mutually prosperous relationship. If these terms are acceptable, please sign in the place provided below. Very truly yours, /s/ Christopher A. Wilson Christopher A. Wilson, CEO Accepted and agreed this 7th day of May, 2008. /s/ Michael D. Suder Michael D. Suder