General Management Services Agreement, effective January 1, 2010, between HidellEyster International and the Company

1.

THIS AGREEMENT by and between Hidell-Eyster International (HEI), 195 Whiting Street, Hingham, MA and PureSafe Water Systems, Inc., 25 Fairchild Avenue, Suite 250, Plainview, NY 11803 (the Client and/or the Company), dated this First Day of January, 2010, wherein HEI agrees to perform certain General Management Services (The Agreement) on behalf of the Client and whereas the Client desires to have such services performed by HEI,

2.

IT IS THEREFORE UNDERSTOOD AND AGREED by and between the Client and HEI that the objective of the Agreement is to manage the Client’s business and oversee financial performance in accordance with the Company’s Board of Directors (the Board) approved Pro Forma Budget and the Operating Business Plan as amended from time to time by mutual agreement between the parties hereto.

3.

NOW THEREFORE the Parties mutually agree that the following professional services will be provided to the Client by HEI:

 

a.

Manage, implement, and oversee the business activities of the Company to help achieve the financial and business development objectives as approved by the Board as part of the Annual OBP as amended.

 

b.

Implement an organizational structure, job responsibilities, and personnel consistent with the Company’s business objectives. This includes providing Carroll S. (Steve) Keim as President, Henry R. (Bob) Hidell as Chief Operating Officer, and Richard Pellerito as Vice President of Technical Sales.

 

c.

Report business performance to the Client’s Board and CEO at least monthly, or as directed by the Board.

 

d.

Integrate with other marketing professionals to implement a marketing and sales program during the six (6) month period from the date of this Agreement in accordance with the business goals set forth in the OBP as amended.

 

e.

Implement product development, production methodology, and research and development in accordance with the OBP as amended.

 

f.

Identify and implement cost-reduction opportunities in accordance with the OBP.

 

g.

Assist the CFO with managing the financial operation of the Company wherein the CFO will oversee funding, cash management, and financial controls including audits, inventory control, accounts receivable, and collections procedures and policies.

 

h.

Participate on the Board of Directors of the Company with one Board seat in Phase 1 and two Board seats on Phase 2.

4.

The Agreement and related management fees explicitly do not include:

 

a.

Additional personnel or services beyond that specified in Section 11, as agreed to by the parties.

 

b.

Due diligence or direct M&A activity for the Company beyond the normal, general management strategy implementation as per the OBP.

 

c.

Direct capital-raising including identifying and bringing in prospective investors. Specific funds raised from HEI contacts will be subject to additional compensation as agreed upon by both parties.

 

d.

Testifying or acting as an expert witness in any and all litigation not directly related to the Client operations during HEI’s contract term.

 

e.

Technical services above and beyond the normal course of business including areas related to water quality management, special customer requests, special technical customer field work, and related technical requirements, including technical design work for new product development and new production facility layouts.

 

f.

Advertising agency costs for development or production of advertising or collateral material.

5.

If any of the services listed above are required during the term of the Agreement, HEI will prepare a separate proposal and budget to provide such additional services, within HEI’s capabilities.

6.

HEI, its employees and agents will not spend more than $10,000 at any one time for any Capital Expense without formal approval from the Company’s CEO and CFO acting in concert.

7.

HEI does not guarantee or assure that any of the business results established or implied in the OBP, or desired by the Client’s bank or shareholders in any loan agreements, will be achieved.

8.

HEI reserves the right to substitute persons other than those named in this contract, with the approval of the Client’s CEO and CFO.

9.

The Client obligations are:

 

a.

To be available by electronic media, or in person for discussions of business matters in a timely manner upon request of HEI management.

 

b.

To pay all management fees to HEI as per this Agreement in accordance with the terms and condition of such payment outlined in Section 11 herein.

 

c.

To pay any pre-approved additional fees within 30 days of invoice as per Section 11 of the Agreement.

 

d.

To carry, for the term of this Agreement, general liability insurance in the amount of $3 million, product liability insurance in the amount of $1 million, and workers’ compensation insurance as required by statute, and name HEI as an additional insured, providing HEI with certificates of insurance.

 

e.

To provide access to HEI normally associated with typical business management practices necessary to work directly with managers within the Client organization. HEI will have direct access to the Chairman of the Board, CFO and Client advisors such as legal counsel, accounting/financial advisors and others as necessary during the full contract period. Existing management will provide full cooperation to HEI at all times, in accordance with appropriate business practices.

10.

The Board of Directors will have the sole right to reject or accept recommendations which HEI may suggest from time. Any recommendations that fall outside of the approved OBP must be brought before the Board of Directors for approval.

11.

In consideration of the mutually agreed upon obligations of the parties hereto, the compensation to HEI will be rendered to HEI by the Client in two phases of contract implementation as follows:

 

a.

Phase 1 – During Phase 1 HEI will provide a minimum of 10 days and a maximum of 15 days of professional services from Carroll S. Keim, serving as President, Henry R. Hidell, serving as Chief Operating Officer, Kathleen Ransome, and Dr. Thomas Brewer. Richard Pellerito will serve as full time Vice President Technical Sales. The services of John Clemmens will be charged at HEI’s rates as set forth in paragraph 11.c. Phase 1 will become effective on January 1, 2010 until June 30, 2010 at which time, Phase 2 will commence.

 

b.

Phase 2 – Phase 2 commences July 1, 2010. During Phase 2, HEI will provide Carroll S. Keim as President for three weeks per month, Henry R. Hidell as Chief Operating Officer for ten days per month, and Richard Pellerito full-time as Vice President of Technical Sales. The services of Kathleen Ransome will be provided for two days per month (to be analyzed on a six month basis), and Dr. Thomas Brewer on a limited basis as part of the monthly fee. Included in said monthly fee shall be the services of John Clemmens not to exceed two days per month when his services are not otherwise defined as part of a “project”. Any time spent by John Clemmens, Kathleen Ransome or Thomas Brewer in excess of two days per month shall be charged at HEI’s rates as set forth in paragraph 11.c. The Company will be invoiced on the first of every month a s per the Terms and Conditions attached hereto.

 

c.

 

1.

Commissions on investment monies brought into the Client as a result of HEI’s efforts and/or contacts - 8 % on direct individual investors and a cumulative fee not to exceed 15% when other finders are involved.

 

2.

Commissions on gross unit sales consummated by HEI – 5 % on individual units and 3% on the sale of two (2) or more units.

 

3.

Commission overrides on all corporate sales - 1%.

 

4.

Professional services provided by John Clemmens, at a rate of $150 per hour or a maximum of $1,500 per day for services not included in the monthly fees set forth in Paragraphs 11.a and 11.b above.

 

5.

The Client agrees to use its best efforts to pay HEI any past due amounts as additional investment capital is raised, but agrees to pay any balances due in full no later than upon receipt of the two million dollars of investment capital received after January 1, 2010.

 

d.

Performance Incentives - The Compensation Committee of the Board will develop and approve annual business performance objectives which provide incentives to HEI up to an additional 20% of HEI’s annual compensation (in cash, equity, or both) based upon achieving the approved performance objectives. The incentive package will be approved by the Company for the year 2010 no later than June 30, 2010 , and thereafter be approved for each successive year no later than February 1 of said year.

12.

Default: The occurrence of any of the following events (individually referred to as an “Event of Default”) will constitute a default under the terms of this Agreement:

 

a.

The failure of the Client to make any and all payments as required in Section 11 of this Agreement.

 

b.

The failure of the Client to permit reasonable access to company information, Senior Executives or the Chairman, or to support staff as required by HEI to fulfill its contract obligations.

 

c.

A breach of any warranty or representation made by either party signatory to this Agreement.

 

d.

The breach of any obligation of the parties hereto for whatever reasons.

 

e.

The dissolution or termination of the existence of either party hereto which could include the filing by either party for bankruptcy protection, the assignment of assets for the benefit of creditors other than those assignments necessary to secure financing, insolvency or a seizure of all or a portion of the property of either party for any reason. This includes a change of ownership of the Company of more than 40% of the total Company equity.

 

f.

The failure to comply with any and all regulations regarding the operation of the company either in respect to financial or general business practices or health and safety related requirements including water quality standards.

 

g.

The assignment by either party of this Agreement, or its terms or obligations, to a third party is expressly not permitted by this Agreement.

13.

 

a.

In the event of a default, the defaulting party will have 30 days after receiving written notice during which to remedy the default if such remedy is practical. The non-defaulting party may at its sole discretion extend the remedy period beyond 30 days if it deems such extension appropriate.

 

b.

In the event that such remedies are not available to the defaulting party, the non-defaulting party if HEI, will have the right to demand and receive from The Client all or any compensation in arrears including out-of-pocket expenses if any, and the right to terminate any and all obligations under the terms of The Agreement.

 

c.

If the defaulting party is HEI, the Client shall have the right to terminate this Agreement in which event HEI will immediately turn over to the Client all papers, plans and work related products associated in any manner with the terms of this Agreement.

 

d.

In the event of a change of ownership in the Company, or a dissolution or takeover of the Company or of its assets, HEI has the right, at its own discretion, to bring the balance of its fees until the end of the term (in both cash and equity) forward and have this balance due and payable upon the date of change of ownership. In the event that this occurs with less than 12 months remaining in the contract, a minimum of 12 months fees will be due and payable. However, if requested by the Client or its successor, HEI shall be obligated during any period it is receiving compensation to provide professional services as described and rendered under the terms of this contract for which it is being compensated.

14.

 

a.

This Agreement is in full force and effect on January 1, 2010 and terminates 36 months later, on December 31, 2012. Each 12 month term will be referred to as the First Term, Second Term and Third Term, and in the aggregate be referred to as the Initial Term. The CEO and CFO with Board approval excluding the HEI board member(s), and with a quorum present, reserve the right to review the Agreement during the First Term only and recommend modifications or to terminate this Agreement without prejudice. Any modifications of the Agreement will be mutually approved by the parties. Written notice of such First Term termination or proposed modifications must be provided to HEI at least sixty (60) days prior to the end of the First Term. Should this Agreement be terminated during the First Term, any funds and equity accrued by HEI during the First Term will be paid in full, plus six months of fees at the rate being charged a t the time of termination. In the event of termination, a six month transition period will take place during which HEI will cooperate fully with the Client to assure a smooth transition. There will be no termination provision for the Second and Third terms, except as provided in Paragraph 12. After the Initial Term, the Agreement will be automatically extended unless either party provides at least ninety (90) days written notice to the other party of termination at the end of the Initial Term.

 

b.

This Agreement and any amendments hereto is the entire Agreement between the parties hereto. Any subsequent modifications or failure to enforce any part or intent of this Agreement does not void any remaining portions. If any portion of this agreement is deemed illegal or unenforceable, the remaining parts will remain in full force and effect and will not be deemed illegal or unenforceable.

15.

 

a.

The Client hereby warrants and represents that:

 

i.

It is authorized to enter into this Agreement by its Board or other such governing body and that such authority is vested in the signature below.

 

ii.

That it is able and willing to meet the financial and operating terms of this agreement.

 

iii.

That it has entered into The Agreement in good faith with a full and clear understanding of its obligations and those of HEI.

 

b.

HEI hereby warrants and represents that:

 

i.

Its President and CEO is fully authorized by the Board to enter into this Agreement and that such authority is vested in the signature below.

 

ii.

That it is able and willing to meet the financial and operating terms of this agreement.

 

iii.

That it has entered into the Agreement in good faith with a full and clear understanding of its obligations and those of The Client.

16.

 

a.

During the term and any renewal thereof and for a period of two (2) years after the termination of this Agreement , HEI agrees that it will not, directly or indirectly, within a fifty (50) mile radius of where the Client has any offices, for itself, its employees, directors, officers and agents or on behalf of, or in conjunction with, any person, firm, corporation or other entity, engage or participate in or become employed by or involved with or render services, directly or indirectly, to or for any person, corporation or other entity which is engaged in the business of designing , manufacturing and selling emergency and disaster relief products and systems.

17.

Non-Solicitation.

18.

Information.

19.

Non- Disparagement:

20.

Non- Circumvention:

21.

22.

Independent Contractor Status:

Print name: Carroll S. Keim

Print name: Leslie Kessler

On behalf of Hidell-Eyster International

On behalf of (Client): PureSafe Water Systems, Inc.

As (title) President

as (title) CEO

On (date) March 26, 2010

on (date) March 26, 2010

Witness_______________________

Witness________________________

1.

Definitions: "HEI" refers to Hidell-Eyster International. "Client" or “Company” refers to the individual, partnership, corporation, or association contracting for Hidell-Eyster International’s services.

2.

Payment: Unless otherwise specified, payment is due in U.S. Dollars from the Client. If payment is not received by the HEI within thirty (30) days following the due date, the Client shall pay interest on the unpaid balance at the rate of seven percent (7%) per annum from the billing date. together with any court costs, attorney's fees, or other expenses reasonably incurred in order to collect such amount. Payment to HEI is the sole responsibility of the Client and is not subject to third party agreements.

3.

Suspension of Work: Invoice payment must be kept current for work to continue. If the Client fails to pay any amount due Hidell-Eyster International under this Agreement within 90 days of the date of invoice, Hidell-Eyster International may, without waiving any other claim or right against Client, suspend services under this Agreement until HEI has been paid in full all amounts due under this agreement.

4.

Cancellation/Modification: Modification of this Agreement shall be effective upon the execution of a mutually satisfactory Modification Agreement signed by both Client and Company.

 

Except as provided in the General Management Service Agreement cancellation of this Agreement shall be effective upon the execution of a mutually satisfactory Cancellation Agreement signed by both Client and Company.

PER DIEM

HOURLY

Principals; Hydrogeologist; Technical Specialist including Geologist, Biologist, Chemist, Environmental Biologist, And Microbiologist

Engineering and Design Services

Expert Witness Services - Research and Management

Expert Witness Services - Depositions and Testimony (Including waiting time)