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LANDSTAR, INC. (OTCMKTS:LDSR) Files An 8-K Entry into a Material Definitive Agreement

LANDSTAR, INC. (OTCMKTS:LDSR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

Entry Into a Material Definitive Agreement.

On February 7, 2019, LandStar, Inc. (the “Company”) entered into an Exclusive License and Management Agreement (the “License Agreement”) with WALA, INC., which conducts business under the name ArcMail Technology (“ArcMail”). Under the License Agreement the Company was granted the exclusive right and license to receive all benefits from the marketing, selling and licensing, of the ArcMail business products, including, without limitation, the good will of the business. Rory Welch, the CEO of ArcMail (“Welch”), shall continue to serve as ArcMail’s CEO. The term of the License Agreement is twenty-seven (27) months, with the following payments to be made by the Company to ArcMail: (i) $200,000 upon signing the License Agreement; (ii) monthly payments starting 30-days after the execution of the License Agreement in the amount of $25,000 per month during months 1-6; (iii) monthly payments in the amount of $30,000 per month during months 7-17; and, (iv) on month 18, final payment in the amount of $765,000.

In connection with the execution of the License Agreement, two other agreements were also executed:

(a) Stock Purchase Rights Agreement: On February 7, 2019, the Company and Welch entered into a Stock Purchase Rights Agreement (the “Stock Rights Agreement”) under which the Company has the right, though not the obligation, to acquire 50% of the issued and outstanding shares of stock of ArcMail. The right can be exercised over a period of 27-months in accordance with the following schedule:

Date of Purchase Right Cash Due Cash Value of Company Shares Percentage of 50% Share

Interest Acquired

Closing -0- $ 95,000 12.50 %
3-month anniversary $ 50,000 $ 85,000 6.25 %
6-month anniversary $ 50,000 $ 85,000 6.25 %
9-month anniversary $ 50,000 $ 85,000 6.25 %
12-month anniversary $ 50,000 $ 85,000 6.25 %
15-month anniversary $ 50,000 $ 85,000 6.25 %
18-month anniversary $ 50,000 $ 85,000 6.25 %
21-month anniversary $ 50,000 $ 85,000 12.50 %
24-month anniversary $ 50,000 $ 85,000 12.50 %
27-month anniversary $ 50,000 $ 85,000 Remainder

The value of the Company Shares shall be equal to the average closing price for shares of the Company’s common stock for the ten (10) trading days immediately preceding each respective date. If the Company fails to exercise any purchase right the remainder of the purchase rights shall terminate and Welch shall have the right to repurchase from the Company (at the same price paid by the Company) all of ArcMail shares acquired by the Company (the “Repurchase Right”).

(b) Business Covenants Agreement: On February 7, 2019, the Company, ArcMail, and Welch entered into a Business Covenants Agreement (the “Covenants Agreement”) under which ArcMail and Welch agreed to not compete with the Company’s use of the ArcMail business under the License for a period of twenty four (24) months from the later of (i) February 7, 2019; (ii) the date on which the Company acquires the 50% of the stock of ArcMail; or, (iii) the last date on which Welch renders services to the Company or any of its subsidiaries.

The term of the restrictions will immediately and irrevocably terminate upon the exercise of the Repurchase Right by Welch. Further, thereafter, the Company will not, for a period of twenty-four (24) months, (i) engage in the business of E-Mail archiving; (iii) solicit any customer of ArcMail; or, (iii) solicit any ArcMail employees.

There are no material relationships between the Company, ArcMail, Welch, or any of the parties to the above described three agreements, other than in respect of such agreements themselves.

The foregoing descriptions of the License Agreement, Stock Rights Agreement, and Covenants Agreement, respectively, does not purport to be complete and is qualified in its entirety by reference to the full text of the License Agreement, Stock Rights Agreement, and Covenants Agreement, a copy of which is filed herewith as Exhibit 10.1; 10.2; and, 10.3 respectively, to this report and is incorporated by reference herein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The discussion in Item 1.01 of this Form 8-K regarding the three agreements noted therein is hereby incorporated in this Item 2.03 by reference.

ITEM 7.01 Regulation FD Disclosure.

On February 11, 2019 the Company issued a press release (the “Press Release”) announcing the execution of the License Agreement, Stock Rights Agreement, and Covenants Agreement. A copy of the Press Release is attached hereto as Exhibit 99.1 and incorporated herein by this reference.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are furnished with this report:

LandStar, Inc. Exhibit
EX-10.1 2 ex10-1.htm     EXCLUSIVE LICENSE AND MANAGEMENT AGREEMENT     WALA,…
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